ATO creates task force to prevent cryptocurrency tax evasion
The Australian Taxation Office is cracking down on crypto but Australian traders still have multiple avenues available for spending their coin.
The Australian Taxation Office (ATO) is working with top-tier industry experts to ensure all appropriate taxes are paid on cryptocurrency transactions. This was prompted by the fact that interest in the asset class has erupted since the last financial year.
The task force is being assembled in order to “follow the money”, investigate transactions using cryptocurrencies and ensure that cryptocurrencies appear on tax returns at the end of the financial year.
Money laundering is another point of focus, with the ATO enlisting the help of the Black Economy Taskforce, which has previously been involved in identifying upwards of an estimated $30 billion in tax evasion.
Bitcoin and the ATO
According to the ATO’s website, “Bitcoin is neither money nor a foreign currency… Bitcoin is, however, an asset for capital gains tax (CGT) purposes.” It also states that records must be kept of all bitcoin transactions, including the date of the transactions, the AUD value, what the transaction was for and who the other party was (even if it’s just their bitcoin address).
It plainly states that bitcoin is classified as an asset for CGT purposes. The ATO clarifies that under the heading “Using bitcoin for personal transactions”, by saying “where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.”
This is perhaps the most relevant for those who wish to spend their bitcoin without first converting it back to AUD.
Spending cryptocurrency on Australian goods and services
Several options exist for Australian traders who wish to spend their cryptocurrency on goods and services in Australian marketplaces without first having to convert their crypto back into AUD and therefore incur CGT.
Fortunately, finder has published several extensive guides on how to do so, with two of the most popular avenues being summarised here:
Living Room of Satoshi (LRoS) lets you pay bills, credit cards and bank accounts instantly using a variety of cryptocurrencies. It is unique to Australia and one of the simplest ways to spend cryptocurrencies on AUD items at fair rates.
- Paying bills. LRoS can be used to pay any service that accepts BPAY.
- Paying off a credit card. Use the BPAY option on your credit card statement to pay it off with cryptocurrency.
Cryptocurrency debit cards work just like any other debit card. You can use them at EFTPOS terminals in-store, withdraw cash from ATMs and enter their numbers when shopping online.
They generally process and convert your bitcoin into the local fiat currency immediately. They’re designed to make spending your cryptocurrency a simple and effortless process, even when the merchant doesn’t accept cryptocurrency payments.
- Top performing super funds for 2020: is yours on the list?
- Finder Daily Deals: The 5 best online deals in Australia today
- A 1.75% fixed rate home loan hits the market today: But how long will it last?
- Dell G7 7700 Gaming Laptop: Boss-acceptable gaming
- How does your health fund compare on 2021 price rises?