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Australian Tax Office Tells Crypto Traders to Declare Gains

Legal

www.cryptoglobe.com 20 December 2018 04:10, UTC
  
Reading time: ~2 m

The Australian Tax Office (ATO) has recently reissued a warning in which it tells Australia’s cryptocurrency traders they have to declare their crypto trading gains when reporting annual revenues.

According to Lifehacker Liz Russell, a senior tax agent at Etax.com.au, said it’s important for traders to understand the ATO sees cryptocurrencies as property and not currencies. This means gains made from selling crypto are to be included as capital gains tax, which also applies to real estate and shares.

The ATO has also clarified that if a cryptocurrency is held for over a year, then the Australian taxpayer who holds it may get a discount of 50% on the capital gains tax. Russell added:

Let’s say you originally bought AUD 5,000 worth of XEM. If you later traded it for fiat currency of AUD 8,500, then the AUD 3,500 in profit is considered a capital gain, and you’ll need to add it to your assessable income for the financial year – much like you would any gains you make the sale of shares or an investment property.

Per Russell, the ATO is reportedly “doubling down with its >

For example if you made a $3,000 loss on the sale of cryptocurrency but a $4,000 gain on the sale of shares, your net capital gain would be the $4,000 gain minus the $3,000 loss, equalling a $1,000 capital gain.

ATO To Enforce KYC While Eyeing Crypto-Trading Gains

Reportedly, the ATO is also making it mandatory for cryptocurrency exchanges operating in Australia to verify the identity of its customers, and to report suspicious transactions that go over the AUD $10,000 limit.

Per Lifehacker’s report, an ATO spokesperson was quoted as saying:

While there is no specific label on the capital gains schedule or income tax return to identify how many people have invested in cryptocurrency we are still looking at lodgement activity this year to determine any significant impact of cryptocurrencies.

The spokesperson added, however, that through its advice and community channel areas it has received an “increase in questions relating to tax obligations of cryptocurrency activity.” Per the spokesperson, the tax agency sees this as a “positive in people wanting to do the right thing in meeting their obligations.”


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