The Australian Taxation Office favors cryptocurrency capital gains for tax purposes

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Cryptocurrency capital gains are one of four primary priority areas for the Australian Taxation Office (ATO) this tax season.

Today, the nation’s main revenue collection agency declared that any digital currencies sold or disposed of this fiscal year, particularly non-fungible tokens (NFTs), shall contain a capital gain or loss and be included in the tax return.

Assistant Commissioner Tim Loh of the ATO said the tax authority focuses on “problematic areas” where individuals make errors. “Crypto is a popular type of asset, and we expect to see more capital gains or capital losses reported in tax returns this year. Remember, you can’t offset your crypto losses against your salary and wages.”

Australia has a reputation for being a cryptocurrency-friendly and stable nation. The Cboe Australia exchange began trading bitcoin (BTC) and ether (ETH) ETFs managed by Sydney-based ETF Securities in collaboration with Switzerland’s 21Shares last week.

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The Australian Taxation Office (ATO) has said that bitcoin is a capital gains tax (CGT) asset. This is due to the Asia-Pacific region’s rising usage of digital assets. According to the Roy Morgan investing study, 5% of Australians already possess at least one cryptocurrency or over 1 million people. Their data collecting methods know that many Australians are buying, selling, or trading digital currency and assets. Therefore, individuals must understand what this implies for their tax duties.

This year’s capital gain regulations also apply to property and stock sales. In addition, the tax authorities is also concerned with record-keeping, work-related costs, rental revenue, and deductions.

The ATO said that taxpayers who intentionally attempt to falsify documents would face strong action.

The Australian Taxation Office has been explaining how the cryptocurrency tax legislation works. For tax reasons, the ATO considers cryptocurrency to be an asset retained or exchanged rather than fiat cash. Therefore, according to the authorities, the tax consequences for cryptocurrency holders are determined by the reason for which the cryptocurrency is obtained or retained.

The Australian Taxation Office (ATO) previously established a dedicated task force to combat cryptocurrency tax avoidance. It also gathers bulk information from Australian crypto-designated service providers to do data matching to guarantee that owners are paying the correct taxes.

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