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Cryptocurrency under microscope this tax time

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Published by:
James Morris
Published on:
June 13, 2021
Modoras Accounting (QLD) Pty Ltd ABN 81 601 145 215
Cryptocurrency under microscope this tax time

The Australian Taxation Office (ATO) is reminding cryptocurrency traders their capital gains are not tax-free and their gains and losses must be declared, even if they’re not cashed back into Australian dollars.

ATO assistant commissioner Tim Loh says gains from cryptocurrency are similar to gains from other investments, such as shares.

In other words, they’re subject to capital gains tax and must be reported.

“We are alarmed that some taxpayers think the anonymity of cryptocurrencies provides a licence to ignore their tax obligations,” Mr Loh says.

“While it appears that cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions and cryptocurrency online exchanges to follow the money back to the taxpayer.”

To make tax-time reporting easier, Mr Loh recommends cryptocurrency traders keep accurate records, including:

  • dates of transactions
  • value in Australian dollars at the time of the transactions
  • what the transactions were used for
  • who the other party was, even if it’s just their wallet address.

Businesses or sole traders that are paid cryptocurrency for goods or services will have those payments taxed as income based on the value of the cryptocurrency in Australian dollars.

Holding a cryptocurrency for at least 12 months may mean you’re entitled to a Capital Gains Tax (CGT) discount if you’ve made a capital gain.

Get expert advice

If you have any questions about your cryptocurrency or other tax obligations, please call Modoras on 1300 888 803.

Make tax time count. Know what you need to prepare for tax time this year.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance, or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals, and circumstances. Information, forecasts, and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies, or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives, or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability is limited by a scheme approved under Professional Standards Legislation.

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