- Australia has required crypto holders to pay taxes on crypto gains and losses
- The tax body will tax cryptocurrencies in the same way as property and shares
- Australia recently approved a Bitcoin and Ethereum ETF
Cryptocurrency taxation has become a top debate in different countries. Australia is joining the list of countries looking to tax crypto gains after the Australian Taxation Office (ATO) announced that crypto capital gains were among the four main focus areas for this year's tax payment period.
Australia plans to tax crypto capital gains
The Australian tax collection agency announced that all forms of cryptocurrency assets, including non-fungible tokens (NFTs) sold and disposed of during the current fiscal year, should account for any capital gains and losses, and the figures should be included in the tax return form.
Tim Loh, the assistant commissioner at the ATO, noted that the agency was focusing on key areas where people made mistakes. "Crypto is a popular type of asset, and we expect to see more capital gains or capital losses reported in tax returns this year. Remember, you can't offset your crypto losses against your salary and wages,"
The crypto regulatory framework in Australia is generally friendly, and the country is currently working on setting up a stable infrastructure where cryptocurrencies can operate. Last week, the country approved two cryptocurrency ETFs.
The Bitcoin and Ethereum ETFs by ETF Securities were launched with Switzerland's 21Shares. The ETFs are already trading on the Cboe Australia Exchange, but they recorded underwhelming performance due to the collapse of the cryptocurrency space. According to the ATO, cryptocurrencies qualify as a capital gains tax (CGT) asset. This follows the increased adoption of cryptocurrencies in the Asia-Pacific area.
"Through our data collection processes, we know that many Aussies are buying, selling, or exchanging digital coins and assets, so it's important people understand what this means for their tax obligations,"
the agency added.
Cryptocurrencies will now be taxed similarly to property and shares that have been sold during this fiscal year. The tax agency is also looking into other areas of taxation, including rental income, deductions, record-keeping and work-related expenses. The ATO added that the firm would take "firm action" against those that changed their records to avoid paying taxes.
Crypto taxation globally
The global crypto landscape is changing, and it is now attracting tax agencies in different countries. The HM Revenues and Customs (HMRC) announced it would allow cryptocurrency investors to offset their losses using future cryptocurrency gains in the UK.
This is a different stance from the one taken by India. The country's lawmakers are currently debating imposing a 28% on cryptocurrency gains. Crypto investors in the country have decried that the tax is significantly high and will stifle crypto investments. The country is also planning to tax crypto trading pairs separately, attracting opposition.
The ATO taxation agency had earlier created a special task force to handle tax evasion in the cryptocurrency industry. The tax body also gathers records from service providers based in Australia to match the data and ensure that crypto holders pay taxes as required.