The Australian Tax Office (ATO) is urging Australians to accurately report any profits made from cryptocurrency trading. Thus, it debunks the myth that cryptocurrency is tax-free or is only taxable when converted back into fiat currency.
According to ATO, Over 600,000 Aussies have invested in cryptocurrency as of late.
Tim Loh, ATO’s assistant commissioner, said that crypto is still mistakenly treated like a currency instead of an asset. Thanks to the exchanges and banking institutions cooperating with the tax office, ATO is aware of those that are invested in cryptocurrency.
“(We) follow the money trail back to the taxpayer and we do that through the ATO which has data matching profiles with cryptocurrency exchanges and they provide that information to us and we use that information to cross match with people’s tax returns,” said Loh.
Loh explained that gains from digital currency are not unlike the gains from other investments, like shares. Investors that buy, sell and swap for fiat money, or trade one crypto for another, will be subjected to capital gains tax (CGT). This would need to be reported.
Holding a digital currency for a minimum of 12 months may qualify them for a CGT discount, if there is a capital gain. ATO said that cryptocurrency may be a personal use asset in limited circumstances.