Cryptocurrency is like any other taxable asset. Though Cryptocurrency is growing in popularity, it is still largely misunderstood and considered complex. As Cryptocurrency slowly becomes mainstream and governments shift their gaze to digital assets, it is now essential to learn about crypto taxes. Here are a few noteworthy things you may want to know about Crytpotaxes:
All crypto sales and purchases are taxable
Cryptocurrency is considered a property and not just another type of currency. All gains and losses made with cryptocurrencies have to be reported to be ATO. Exchanging crypto curries for another, converting it to Australian dollars, and spending Cryptocurrency is subject to capital gains tax and must be reported to ATO.
Miners are also liable to taxes
Cryptocurrency mining is classified as self-employment. So cryptocurrency miners are also liable to pay self-employment taxes. That said, miners can also deduct self-employment expenses like electricity.
If you have been holding crypto assets for more than 12 months, you could apply for a CGT discount:
● 50% for resident individuals (including partners in partnerships)
● 33.33% for complying super funds and eligible life insurance companies
● 50% discount is removed or reduced on capital gains made after 8 May 2012 for foreign resident individuals
Buying with Cryptocurrency and airdrops
If you buy goods or services using Cryptocurrency, your transaction is not taxable. For instance, if you bought a gadget with Cryptocurrency, then taxes can be levied on the transaction.
Airdrops are crypto rewards given to people promoting crypto products on various platforms. These rewards are crypto coins, most of the time that are liable to tax payment.