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ATO continues to target Cryptocurrency disposals

ATO continues to target Cryptocurrency disposals

The ATO is increasing its collection of information from Cryptocurrency Exchanges to ensure Australian taxpayers are declaring their earnings from crypto-assets.

Cryptocurrency is generally used to describe a digital asset in which encryption techniques are used to regulate the generation of additional units and verify transactions on a blockchain. Cryptocurrency generally operates independently of a central bank, central authority or government.

A Capital Gains Tax (CGT) Event occurs when you dispose of a cryptocurrency in any of the following ways:

  • sell or gift cryptocurrency
  • trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)
  • convert cryptocurrency to fiat currency (a currency established by government regulation or law), such as Australian dollars, or
  • use cryptocurrency to obtain goods or services.

To ensure you are correctly declaring your cryptocurrency earnings, keep records of all purchases and sales.

By letting us know your investment decisions ahead of time we can offer structuring and tax planning advise before crucial tax events happen, which may help you operate more tax effectively.