Australian Tax Office (ATO) Targets Crypto Holder
Australian Tax Office (ATO) has vowed to keep a track of all the Australians hiding their cryptocurrency profits offshore by the use of data-matching services that also target unexplained wealth and assets.
Crypto investors are quite enthusiastic when it comes to crypto returns and cash out their returns as soon as they gain, owing to the volatile nature of the market. ATO has considered cryptocurrency as an asset and wants to make sure that it gets its deserved cut too.
Bitcoin valued at more than US$30 billion worth of BTC has been exchanged for fiat since the beginning of the year 2018. ATO considers earnings to be capital gains and as such, they should be taxed as per the taxation norms of the country.
Cryptocurrency investors, on the other hand, argue that crypto is an anonymous payment system and hence shouldn’t be the part of the existing tax norms and not be taxed as such. ATO pints out that once the crypto is converted to fiat, the organization has many ways to find out the unusual and large deposits that would disclose an individual’s financial condition.
If traders encounter a loss in the crypto market, then as per the taxation rules, it will be considered as a write-off. Similarly, if there is a capital gain, for example, if a person earns a gain of $6,000 on the sale of shares and also loses out $5,000 on sale of crypto, then, in this case, the net capital gain will be considered as the difference between the gain made and the loss incurred. Here, the capital gain will be the difference between $6,000 gain on the sale of shares and $5,000 lost on the sale of cryptocurrency. So, the capital gain will be $1,000.
There is an option kept open for those who want to avoid tax payment to the government and want to cash out. There are crypto friendly towns in Australia, which includes The town of 1770 and Agnes Water, where visitors can use digital currency for virtually anything. So a person can use the coin without incurring the problem of taxation.
The rule says that crypto is a property and if sold for a profit, it will be liable for capital gains tax (CGT). If before the crypto being used or sold, an Australian resident holds the crypto for more than 12 months period, then the criteria would differ. The resident in such a case is eligible for the 50 percent CGT discount and the resident is considered as a “cryptocurrency investor”. Though there are some exceptions to the taxation aspect also.
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