The Australian Tax Office Is Looking Into Your Bitcoin

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The Australian Taxation Office (ATO) is establishing a taskforce to monitor cryptocurrency transactions, according to a report in The Australian Financial Review. The taskforce aims to ensure cryptocurrency investors are paying the correct amount of tax.

A team of specialists across tax law, technology, banking and finance will devise strategies to follow the money on gains made from investment in digital currency.

“We are consulting with key stakeholders who have expressed an interest in tax issues relating to cryptocurrencies,” a spokesman for the ATO said.

“We will discuss common queries and scenarios, practical issues and the tax implications for current and anticipated future developments in relation to cryptocurrencies.”

Bitcoin is trading lower today, falling below $US14,000 on the composite index this morning (AEDT) tracked by, after climbing above $US15,000 overnight.

Australian banks — still battered and bruised over extensive money-laundering revealed last year — are also believed to working with the ATO and Austrac, to assist in tracking money flows stemming from cryptocurrency investments.

Bank customer accounts can be mined by the ATO for large transactions made or received, as tax authorities establish ways to follow the money trail.

At the end of last year, some cryptocurrency investors said Australian banks were freezing their accounts and banning transfers to cryptocurrency exchanges.

Regulatory risk is one of the main question marks hanging over cryptocurrencies in 2018 as more money flows into the market.

In addition to increased oversight from tax authorities and banks, corporate watchdogs — such as ASIC in Australia — are also establishing stricter guidelines for how cryptocurrencies will need to comply with corporate law.

In addition to following the money trail, the ATO is also seeking advice on how they will tax cryptocurrency transactions and determine tax liabilities, a tax specialist told the AFR.

Currently, the ATO does not recognise bitcoin and other cryptos as money or foreign currency for tax purposes. Instead, they are assessed as assets for the purpose of calculating capital gains tax.

Tax specialists are receiving an increasing number of queries about the tax implications of cryptocurrency investments.

The first meeting of the ATO and various industry experts is expected to take place next month.


    What if you are mining it rather than investing directly?
    Does that mean you can deduct the electricity and GPU purchase costs etc. to offset against the BTC earned?
    Do you pay income tax or capital gains? For many, managing their mining farm is their job.

        What does "You are required to bring to account any bitcoin on hand at the end of each income year." mean?
        Does it mean you have to cash it in?

          Nah just to make sure you have records.

          However ATO has a number of failures here, I'll list them in ascending order. I believe #1 is enough to ignore all this completely:

          1. They have allowance for <$10K if it's for personal use. Their definition is poorly defined, and at the end of the day they can just say "nah you invested this", but its a huge ass loophole.

          2. They only ever talk about bitcoin, not Bitcoin. What the fuck is bitcoin? Even if we were to stretch what they mean and apply it to Bitcoin, that's just one coin.

          3. They actually hilariously have definitions for 'digital currency', however even that one means that a lot of cryptocoins don't apply. Further, absolutely none of the links or Tax Determinations use the definition for 'digital currency', only 'bitcoin' as in #2, so at the end of the day they are maming determinations about some random undefined object so we can ignore all determinations related to it.

          Proceed at own risk. Maybe ATO will even pick this up and fix it before tax return submissions are open. Currently, their laws are a shitshow and IMO can be somewhat safely ignored in most cases.

    What if you were given a few BTC as a gift years ago, and you just ignored it until it suddenly ballooned in value, is it all still considered a gift? :/

    Last edited 10/01/18 5:42 pm

      The gifter needs to make note of this too. You take on the gift at the value at time of gift.

      Only once you sell it does it have tax implications.

    Fuck the ATO, they aren't getting a dime from crypto that was purchased with already taxed income and then traded or held at MY risk.

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