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  • Why we look at cryptocurrency

    The innovative and complex nature of cryptocurrencies can lead to a genuine lack of awareness of the tax obligations associated with these activities. Also, the pseudonymous nature of cryptocurrencies may make it attractive to those seeking to avoid their taxation obligations.

    As interest in cryptocurrency has increased, the ATO has worked with partners to:

    • understand the tax implications
    • plan an appropriate regulatory response.

    This ensures our approach is consistent with government policy and aligned to that of our partner agencies.

    The tax consequences for taxpayers acquiring or disposing of cryptocurrency vary depending on the nature and circumstances of the transaction.

    The cryptocurrency data-matching program will allow us to identify and address multiple taxation risks:

    • Capital gains tax (CGT) – If you acquire cryptocurrency as an investment, you may have to pay tax on any capital gain you make on disposal of the cryptocurrency. Disposal occurs when
      • selling cryptocurrency for fiat currency
      • exchanging one cryptocurrency for another
      • gifting cryptocurrency
      • trading cryptocurrency
      • using cryptocurrency to pay for goods or services 
       
    • Omitted or incorrect reporting of income – In some situations cryptocurrency transactions can also give rise to ordinary income. Taxpayers who trade cryptocurrency or businesses that accept cryptocurrency as payment have obligations to report the income generated in their tax returns.
    • Fringe benefits tax (FBT) – When employees receive cryptocurrency as remuneration under a salary sacrifice arrangement, the payment of the cryptocurrency is a fringe benefit.
      Last modified: 09 Jun 2021QC 65885