Australian Tax Office Seeks Input On Cryptocurrency Tax Obligationsbr>
The Australian Tax Office (ATO) has launched a community consultation to seek feedback on practical compliance issues arising from complying with taxation obligations in relation to cryptocurrency transactions.
On March 13, the ATO updated its web guidance tax treatment of cryptocurrencies to address some of the common enquiries in relation to cryptocurrency transactions. But increased interest in cryptocurrencies has resulted in queries from the community about how to approach specific tax events.
As a result, the agency launched a public comment process to seek feedback about cryptocurrency and its tax implications as the technology may impact how business operates in the future.
“In particular, we are interested in any practical issues that may impact on taxpayers’ abilities to calculate and substantial any capital gains and losses for capital gains tax (CGT) purposes,” the ATO said. “Your feedback may also be taken into account when developing further advice and guidance products in relation to the taxation of cryptocurrency.”
The public comment process is limited to the following issues: record-keeping as it relates to cryptocurrency transactions, and exchanging one cryptocurrency for another cryptocurrency.
According to the ATO, bitcoin is neither money nor Australian or foreign currency. Rather, it is property and is an asset for CGT purposes. Other cryptocurrencies that have the same characteristics as bitcoin will also be assets for CGT purposes and will be treated similarly for tax purposes.
In October 2017, the Australian government ended its so-called “double taxation” penalty for cryptocurrencies. Under that law, Australians were taxed when they bought cryptocurrency and then again when buying items subject to taxation, in effect, paying twice.