This was the headline of an ATO media release earlier last month, in an area with a large amount of taxpayer confusion.
“The ATO estimates that there are over 600,000 Australian taxpayers who have invested in cryptocurrency in recent years, hence it is an area of CONSIDERABLE ATO focus this tax season.”
Many taxpayers believe that they only need to declare their income from crypto gains and pay their tax once the cash hits their bank account >> This is however false.
Much like Share Sales, the capital gain occurs when a single unit of any cryptocurrency is disposed of, sold, or swapped for another coin.
This is particularly relevant when switching from one platform or carrier to another.
The event of the cash withdrawal is irrelevant, albeit the ultimate point of potential discovery.
Whilst Etoro, Coinspot, and Binance have been popular platforms for Australians to buy and sell Crypto, they are not able to produce the Tax Reports required for Income Tax Purposes.
If you have had disposals of CryptoCurrency in the Financial Year just ended, you will need to set up a Crypto Tax App, which integrates with your exchange.
A few popular Tax Reporting apps to mention are:
Whilst these platforms do charge a fee, they are necessary to file your 2021 Tax Returns.
The ATO is aware of uncertainty causing misconception in this area along with deliberate incorrect treatment and has indicated they will be aggressive in determining the correct tax outcome with penalties to apply.
If you need any assistance or advice regarding your crypto situation this financial year, please reach out to us on 08 9266 0000, or admin@connollysbs.com.au
