Tax office has crypto profits firmly in its cross hairs
The Australian Taxation Office is targeting cryptocurrency profits, investment property deductions and work-related expenses in annual tax returns this year.
While many investors like the anonymity of crytpocurrency trading, when it is held as an investment it is classed by the ATO as an asset. If later sold at a profit it is subject to Capital Gains Tax (CGT).
Assistant Commissioner Tim Loh says if you exchange Bitcoin for another cryptocurrency, or convert it into regular sovereign currency, such as Australian dollars, a taxable event is created.
“Prices [of some cyptocurrencies] have rocketed and we have seen a lot more people investing in them, particularly in the past 12 to 18 months,” he says.
“We have data-matching protocols [in place] to ensure people who are trading cryptocurrency are paying the right amount of tax,” Loh says.
While CGT applies to crypto profits, investors still benefit from a 50 per cent discount on the tax if the crypto is held for at least 12 months.
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