Australian Tax Office Tells Crypto Traders to Declare Gains

The Australian Tax Office (ATO) has recently reissued a warning in which it tells Australia’s cryptocurrency traders they have to declare their crypto trading gains when reporting annual revenues.

According to Lifehacker Liz Russell, a senior tax agent at Etax.com.au, said it’s important for traders to understand the ATO sees cryptocurrencies as property and not currencies. This means gains made from selling crypto are to be included as capital gains tax, which also applies to real estate and shares.

The ATO has also clarified that if a cryptocurrency is held for over a year, then the Australian taxpayer who holds it may get a discount of 50% on the capital gains tax. Russell added:

Let’s say you originally bought AUD 5,000 worth of XEM. If you later traded it for fiat currency of AUD 8,500, then the AUD 3,500 in profit is considered a capital gain, and you’ll need to add it to your assessable income for the financial year – much like you would any gains you make the sale of shares or an investment property.

Per Russell, the ATO is reportedly “doubling down with its data-matching technology” to make sure cryptocurrency traders pay taxes related to their gains, but exempts crypto assets worth less than AUD $10,000 as these are considered an asset for enjoyment or personal use.

Declaring Losses

This year the cryptocurrency market saw a significant decline, with BTC, the flagship cryptocurrency, going form a near $20,000 all-time high to a $3,200 low before starting to recover.

As such, Russell noted some may end up having to declare losses, which may help them reduce tax liability. The tax agent was quoted as saying:

For example if you made a $3,000 loss on the sale of cryptocurrency but a $4,000 gain on the sale of shares, your net capital gain would be the $4,000 gain minus the $3,000 loss, equalling a $1,000 capital gain.

ATO To Enforce KYC While Eyeing Crypto-Trading Gains

Reportedly, the ATO is also making it mandatory for cryptocurrency exchanges operating in Australia to verify the identity of its customers, and to report suspicious transactions that go over the AUD $10,000 limit.

Per Lifehacker’s report, an ATO spokesperson was quoted as saying:

While there is no specific label on the capital gains schedule or income tax return to identify how many people have invested in cryptocurrency we are still looking at lodgement activity this year to determine any significant impact of cryptocurrencies.

The spokesperson added, however, that through its advice and community channel areas it has received an “increase in questions relating to tax obligations of cryptocurrency activity.” Per the spokesperson, the tax agency sees this as a “positive in people wanting to do the right thing in meeting their obligations.”

Swiss Data Agency Claims No Contact with Facebook Over Libra

Michael LaVere
  • David Marcus told Congress on Tuesday that the FDPIC would oversee data protection and security for libra. 
  • Swiss agency claims to have had no contact with Facebook.

The Swiss agency supposedly responsible for overseeing the data protection of libra reports having no contact with Facebook. 

David Marcus Goes Before Congress

In a hearing held before members of the US Senate Banking Committee on Tuesday, Facebook’s David Marcus attempted to quell concerns over libra’s security.

Marcus explained that data and privacy protections for the company’s digital currency would be under the regulation of the Swiss Federal Data Protection and Information Commissioner (FDPIC). 

However, FDPIC claims to have had no contact with Facebook. 

No Word From Facebook

According to a report confirmed by CNBC, the social media platform has yet to reach out to FDPIC, despite Marcus’s testimony to Congress. 

Hugo Wyler, head of communication at FDPIC, told CNBC, 

“We have taken note of the statements made by David Marcus, Chief of Calibra, on our potential role as data protection supervisory authority in the Libra context. Until today we have not been contacted by the promoters of Libra.”

Wyler left the door open for his agency to work with Facebook, but explained they would need more information before proceeding. 

He continued, 

“We expect Facebook or its promoters to provide us with concrete information when the time comes. Only then will we be able to examine the extent to which our legal advisory and supervisory competence is given. In any case, we are following the development of the project in the public debate.”

A spokesperson for Facebook confirmed that they have yet to contact the FDPIC.

Libra Facing Pressure

Since officially announcing the digital currency in June, libra has come under fire from regulators around the world. US Federal Reserve Chairman Jerome Powell claimed the digital currency posed “serious concerns” for money laundering and user protection. On Tuesday, Marcus was repeatedly grilled by senators with questions related to data privacy. 

Marcus also told Congress that the Swiss Financial Markets Supervisory Authority (FINMA), would be the main financial regulator for Libra. Unlike the FDPIC, the Swiss regulator has confirmed its partnership with Facebook.

Facebook appears to have kicked a hornet’s nest in the US Congress over issuing its digital currency.

Last week, an unofficial copy of a bill surfaced online with the title “Keep Big Tech out of Finance.” The bill was reportedly drafted by members of the House Financial Services Committee--who will meet with Facebook on Wednesday--with the goal of preventing large platforms from issuing their own currency.