The cryptocurrency industry is booming in Australia. And as more and more people invest in digital currencies, the question of how these investments will be taxed is becoming increasingly important.
“Cryptocurrency is not considered legal tender in Australia but is treated as property for tax purposes. This means that any gains or losses from buying, selling, or trading cryptocurrencies are subject to capital gains tax (CGT),” says Shane Perry, cryptocurrency and investment specialist at Maxfunding.
If you’re thinking of investing in cryptocurrency, it’s essential to be aware of the tax implications. This guide will explain everything you need to know about crypto taxes in Australia. However, this guide is only general information and does not constitute tax advice. You should always speak to a qualified tax professional about your circumstances.
What Is Cryptocurrency?
Cryptocurrency is a digital or virtual currency that uses cryptography to secure transactions and control the creation of new currency units. Cryptocurrencies are decentralised, which means they are not subject to government or financial institution control.
Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Since then, thousands of other cryptocurrencies have been created. These include Ethereum, Litecoin, Ripple, and Bitcoin Cash.
Cryptocurrencies are bought and sold on exchanges and can be used to purchase goods and services.
How Is Cryptocurrency Taxed In Australia?
Cryptocurrency is treated as property for tax purposes in Australia. Any gains or losses from buying, selling, or trading cryptocurrencies are subject to capital gains tax (CGT).
If you hold cryptocurrency as an investment for more than 12 months, you may be eligible for a CGT discount of 50%. This means that only half of your capital gain is taxable.
Cryptocurrency transactions are also subject to GST. You must pay GST on any goods or services you purchase using cryptocurrency.