Regulators are framing the severe set of laws to effectively regulate cryptocurrencies or digital assets within the regions. Just like HongKong’s SFC planned for tightening regulations, the Australian Tax Office or ATO has sent warnings to Australians to open up their annual returns gaining from cryptocurrency.
“However, we have observed through our ATO community channel and advice areas an increase in questions relating to tax obligations of cryptocurrency activity, which we see as a positive in people wanting to do the right thing in meeting their obligations.”
Cryptocurrency Not a Currency But a Property – Australia
Australia’s consent sees Bitcoin and cryptocurrency as a property and not currency. They assume it a property for taxpayers for which they’re liable to pay capital gain tax on digital assets sold for a profit after July 2017. The tax on cryptocurrency in Australia counts for the period of 12 months, as such if anyone is holding the cryptocurrency without using it or selling it either, will be responsible to pay 50 percent capital gains tax discount. This is how they make holders of crypto as the investors.
Accordingly, taxpayers have to keep regular records of their transactions with the dates and the number of transactions in terms of Australian dollars citing the purpose of the transaction and the party involved to complete the trade. Moreover, ATO urges to add the other party’s wallet addresses for better clarity regarding the records.
With this, it also intimidates crypto enthusiasts that they can also access such records by connecting through the exchanges or wallets that completes the transactions.
Determining the Impact of Cryptocurrency
All the digital currency exchanges in Australia has to be registered with the Australian Transaction Reports and Analysis Centre. Consequently, ATO reports that these exchanges have to be vocal about their customers whose transactions surpasses $10000 limit. Additionally, these trading platforms have to verify the identity of their customers. While investigating the impact of cryptocurrencies, ATO spokesperson told that;
“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,”
Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com