Australia is one of the continents that have accepted the Cryptocurrencies with open arms. Trading in Cryptocurrencies is a legal ledger in Australia. Everybody is allowed to trade in cryptocurrencies. Australia has already issued the necessary bills to make the regulation of the cryptocurrency a legal activity.
This has created opportunities for Blockchain start-ups. Today, there are more than thousands of online platforms that you can use in Australia to trade with Cryptocurrencies. One of the most popular online platforms is the Bitcoin revival. This platform is among some new platforms that have gained their audience trust. Read more all about cryptocurrencies.
Cryptocurrencies are legal entities in Australia; hence, they are liable to pay taxes on the crypto profits. Let’s have a look at Australia’s taxation policies for the Cryptocurrencies.
How Cryptocurrencies Are Taxed In Australia?
The Australian Government has accepted the use of Cryptocurrencies so that it can enforce taxes on crypto profit to boost their financial standing. According to the ATO (Australian Tax Office), Bitcoins and any digital currency or other cryptocurrencies that come close to Bitcoin comes under the Taxation jurisdiction.
In Australia, Bitcoin is considered as goods, hence, if you are holding Bitcoins, that means you are holding property and you will be charged with CGT (Capital Goods Tax).
Bitcoin fall under the same assets group as gold and silver and crypto traders are taxed according to their annual profit they make out of the crypto trade.
As the Crypto traders are liable to pay taxes on the Crypto gains, traders are asked to keep track of every transaction they have made in form of Cryptocurrencies.
The best part of the Crypto taxation is that you can offset other profits with other losses. This way you will be able to reduce the total taxation amount.
How Cryptocurrency Capital Gains Are Calculated?
There are several laws for the taxation on the Cryptocurrencies. Each law support different scenarios. For instance, if you have kept the Cryptocurrencies from more than 12 months untouched then the Cryptocurrency is treated more like property than currency.
In this kind of scenario, you just need to subtract the cost price of the cryptocurrency from the total value of the Cryptocurrency at the time of taxation. The amount that will have will be accountable for taxation.
Let’s see the percentage of taxation you will have under different kinds of capital gain.
- On Residential Individuals, taxation is 50%.
- 33% for the insurance companies.
- Taxation are reduced by 50% on reduced capital.
How Forks Help You With Taxation?
When there is a scenario of Bitcoin Fork, then it is considered that you have accrued no income. Hence, you will be free from any taxations. If there is a person who is using the Crypto coin only for their individual purpose then it will be treated as a property, but the moment Cryptocurrencies are used for trade deals, it will fall under business and you will be charged accordingly.
How Businesses Are Taxed In Australia?
In Australia, Cryptocurrencies (especially Bitcoins) are considered as goods. So, during the time of the Taxation period, they fall under the Capital goods tax. With that being said if you are using Cryptocurrencies for your personal use then it is considered as property and you will be charged on the basis of ordinary income, but once you start using the Cryptocurrencies in the trade market, it is considered as a business and you will be taxed accordingly.
Cryptocurrencies are quite popular in Australia and the people are well aware of the fact that it has been accepted by the Australian government. This has made the citizen free to use the cryptocurrency as they please.