The Australian Taxation Office (ATO) has announced its plan to start focusing on cryptocurrency taxation. The tax body said it would require Australians dealing in cryptocurrencies to start reporting capital gains and losses in their tax returns.
Australia starts taxing crypto
The ATO has said that cryptocurrencies should be treated the same as digital properties. Australians that sell crypto assets, including non-fungible tokens (NFTs), have to calculate and report the capital gains or losses in the tax return documents.
Capital gains and losses are calculated from the difference between the market price of an asset when it was bought and the value of the asset when it was sold. The ATO said that the tax would apply when the holder of a digital asset trades, sells, converts or uses it as a medium of exchange.
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The Assistant Commissioner of the ATO, Tim Loh, said that the tax authority was notified of many Australians participating in the cryptocurrency space. Therefore, people needed to understand the effects this could cause on tax obligations to make the right tax reports.
The ATO plans to focus its taxation plans on other three significant areas such as work expenses, rental properties and record keeping. Aussies will also be required to maintain records of cryptocurrency transactions regardless of whether they are using cryptocurrencies for investment, personal use or business purposes. Cryptocurrency investors will also include a purchase receipt or the transfer of assets, exchange records and digital wallet records.
Australian Taxation Office warns cryptocurrencies
Those who participate in the cryptocurrency sector can also face tax penalties from the ATO after an audit. Additionally, the ATO has also warned cryptocurrency traders about the risks faced by reporting false figures about cryptocurrency gains and losses.
“For those people who deliberately try to increase their refund, falsify records or cannot substantiate their claims, the ATO will be taking firm action to deal with these taxpayers who are gaining an unfair advantage over the rest of the Australian community who are doing the right thing,” Loh added.
Another report also said that the regulator was already reaching out to investors in the cryptocurrency sector, notifying them of the plan to tax their crypto gains and losses. The tax body has already contacted more than 350,000 investors in the space and warned them that they should report their taxes in the right manner to avoid penalties.
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Source: https://insidebitcoins.com/news/australia-plans-to-tax-cryptocurrencies-during-the-current-fiscal-year