ATO eyes cryptocurrency activity in annual tax returns

ATO eyes cryptocurrency activity in annual tax returns

The Tax Office has restated warnings to Australians trading cryptocurrency to declare profits in their annual returns, amid an increase in questions about reporting requirements.

Bitcoin and other cryptocurrencies are considered property, not currency, for tax purposes in Australia, making them liable for capital gains tax when sold for a profit after July 2017.

If the cryptocurrency is held by an Australian resident taxpayer for more than 12 months before being sold or used, the taxpayer may be eligible for the 50 per cent capital gains tax discount, making them a cryptocurrency “investor”.

Exemptions for personal use apply, including to assets worth less than $10,000, which are maintained for personal use or enjoyment.

Errors relating to income from cryptocurrency, the sharing economy and foreign-sourced income are among the most common tax time mistakes.

An ATO spokesman said increased investor transparency had been created through changes to Australia’s anti-money laundering and counter-terrorism financing laws, including by requiring digital currency exchanges to register with the Australian Transaction Reports and Analysis Centre.

Exchanges are required to verify the identity of their customers and report suspicious transactions over $10,000.

 

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Source: ATO eyes cryptocurrency activity in annual tax returns

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