Reporting Cryptocurrency Transactions at Tax Time

Crypto transactions are on the ATO radar. Tax and GST rules apply the same to crypto as to other forms of payment, just like bartering. Talk to us about getting your crypto transaction records together for your tax return.

Have you dived into the world of cryptocurrency exchanges? Cryptocurrency is used to describe encrypted virtual currencies which exist as digital tokens. This digital currency operates outside of government via decentralised ledgers or digital wallets but can be exchanged for online goods and services. The ATO treats cryptocurrency as a form of barter exchange. There is no problem with exchanging goods and services so long as the transactions are recorded and valued correctly.

Business or Personal? Whether it’s business or personal, crypto exchanges (buying, selling or holding crypto assets) are subject to the same income tax and GST treatment as cash or credit transactions. If you use cryptocurrency in your business, you'll need to account for cryptocurrency just as you would for other business transactions. If you’ve used it for personal investment, you’ll need to include details in your income tax return. The ATO uses data supplied by Australian cryptocurrency exchanges, state revenue offices and shares data to cross-reference the crypto gains and losses information in your tax returns.

Crypto Transaction Records Keep records of all transactions, including dates, AUD value, the nature of the transactions, exchange receipts, legal costs and other parties involved (even a crypto address is enough) in the sale or purchase of cryptocurrency.

Cryptocurrency and the ATO The ATO has taken a lenient approach to pursue taxation of crypto assets. However, now that cryptocurrency is attracting more mainstream investors and there is a lot more data available, the ATO checks the taxation obligations of individuals and businesses with crypto assets. There are different rules for using cryptocurrency in business and for personal expenses or investment. Business transactions use the trading stock rules, while private exchanges involve capital gains tax rules. Talk to us. We’ll check that all your crypto transactions are recorded correctly for your tax return. Don’t get caught out by the ATO spotlight on cryptocurrency at tax time!