Cryptocurrency and the ATO

Let’s address those misconceptions

The world of cryptocurrency has a lot of benefits. And misconceptions. The biggest one is that cryptocurrencies are outside government control (think about it; if that were true, cryptocurrency wouldn’t even be legal). Here’s the truth: 

• There’s no escaping the taxman — you still have to pay tax on crypto-transactions. 
• There are no tax benefits for using cryptocurrency. Tax treatments on crypto profits are the same as profits gained through any asset sale. 
• Although there are over 4,500 types of cryptocurrencies, the ATO doesn’t distinguish one type from another or treat any type preferentially.
  

The ATO is ready 

This financial year, up to 600,000 Australian cryptocurrency traders will have their details handed over to the ATO. This includes basic details like names, addresses, emails, birthdate, phone numbers, and even social media accounts, as well as more comprehensive info on bank statements and transactions. Seem invasive? There’s a good reason for it. 

Cracking down on crypto 

The data gathered by the ATO will be used to identify taxpayers who failed to report a disposal of cryptocurrency in their income tax return. Anyone who fails to disclose cryptocurrency transactions and pay the correct tax will face penalties, and possibly fines, from the ATO. The kicker? Any fines acquired can’t be paid with cryptocurrency. 

Don’t panic. Call Ascent.  

If you deal in cryptocurrencies and worry you might have an ATO target on your back, talk to us. We’ll explain the cryptocurrency-tax relationship in more detail, ensure you’re paying the correct tax, and help you avoid costly penalties.