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.”

Uzbekistan Reportedly Looking to Launch National Cryptocurrency Mining Pool

Uzbekistan is reportedly looking to launch its own national cryptocurrency mining pool and a cryptocurrency exchange to accompany it, in bid to bring crypto miners out of the shadows and attract foreign investors.

According to news.bitcoin.com, a government body under the President of Uzbekistan, the National Agency for Project Management (NAPM), has revealed at a conference its plans for the cryptocurrency and blockchain sector this year.

The organization’s plans include the launch of a national mining pool to help consolidate the mining power of domestic and foreign miners in the country, and a cryptocurrency ensure to help miners sell their digital assets.

Local news outlets reported the country is launching its national mining pool to increase transparency and security for cryptocurrency miners, and to make it more attractive for foreign investors. The NAPM also reputedly claims the pool will improve energy efficiency.

The accompanying digital asset exchange, dubbed Uznex, is based in the country’s capital, Tashkent, and will be operated by the South Korean Kobea Group. It’s set to launch next week, on January 20. Its currently lists several trading pairs including ETH/BTC, ETH/BCH, and BTC/BCH. The trading platform’s website is still in beta, but it already notes users will be charged a fee to withdraw funds.

While the initiative seems to be pro-cryptocurrency, the news outlet points out there’s more to look into. As CryptoGlobe covered, last December an order that restricts how Uzbeks can trade cryptocurrency was issued, effectively restricting them to licensed exchanges only.

Another government order tripled electricity prices for domestic cryptocurrency miners, completely crushing their operations’ profitability.  This, unless they moved to the national mining pool, which would allow them to pay standard rates.

Vyacheslav Pak, the NAPM’s deputy director, was quoted as saying:

I think this will be one of the main measures to encourage participation in this pool.

Featured Image Credit: Photo via Pixabay.com