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Cryptocurrency & Digital Assets

Cryptocurrency, NFT's and other digital assets usually need to be reported on your tax return. Events that need to be shown on your tax return include (but aren't limited to) when you do the following:

  • Sell a crypto asset

  • Gift a crypto asset

  • Trade or exchange a crypto asset for another crypto asset

  • Convert a crypto asset to Australian or foreign currency (“fiat currency”)

  • Buy goods or services with a crypto asset

  • Enter into an agreement or contract where you receive remuneration in the form of crypto

  • Enter into an agreement or contract where you receive compensation (“interest”) for your investment in the form of crypto

Common Myths about Cryptocurrency

  • I don't need to pay tax on my digital investments.

 Most cryptocurrency transactions are taxable, just like any other investment. For more information click here

  • I don't need to report my digital investments until I withdraw funds from my crypto wallet.

Cashing in your crypto or transferring it from your trading platform/wallet to your bank account isn't usually the time at which your CGT or tax event occurs. 

  • My investments aren't visible to the government or the ATO.

Cryptocurrency exchanges are required to provide details of accountholders and transactions to AUSTRAC. 

  • My portfolio has gone down in value so I don't need to report anything.

Market fluctuations are not necessarily an indicator of your tax position.

  • A screenshot of my current holdings or wallet is enough to determine what needs to be included on my tax return.

Your current balance does not show us any profits or losses that you have generated.

  • I can give you reports from my wallet or trading platform to show what needs to be included on my tax return.

Many exchanges, wallets or platforms will produce reports that still require conversion to Australian Dollars so we can calculate the correct amounts to include on your tax return.

We strongly recommend you use appropriate software to produce the correct tax reports for us to review such as Crypto Tax Calculator, Koinly or Cointracker.

  • I have already received my Notice of Assessment from the ATO, so I don't need to worry about including my cryptocurrency information.

The ATO may still undertake a review or audit of your tax return after your assessment notice has been issued. If your tax return was not correct when you submitted it, you may be liable for fines, penalties, interest or prosecution. If you need to amend or change a tax return that has already been submitted please contact us.

  • I didn't understand the tax implications of cryptocurrency so I can't be held responsible for not having the necessary information or getting it right on my return.

You are responsible for keeping records that relate to your financial affairs and providing this information to either your tax agent or the ATO.

Please get in touch, we are happy to help.

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