With national authorities gradually stretching their cover over crypto and digital assets, the agency responsible for taxes in Australia, the Australian Taxation Office (ATO) has issued a release through which it emphasized that funds received from the sale of virtual assets must go into the tax books.
Through this release, the ATO explained that every time a virtual asset, be it cryptocurrency or Non-Fungible Tokens (NFTs) is exchanged for a price either lower or higher than it was bought, such must be reported for capital gains or losses.
ATO’s assistant commissioner, Tim Loh disclosed that through available data, it is clear that the tax records do not match the number of Aussies that are actively engaged in buying, selling, and exchange of cryptocurrencies and other virtual assets.
“Losses made from crypto cannot be offset against your monthly retribution,” he said.
Going by the released guidelines which place crypto in the same asset class as property and shares, which are known for attracting capital gains tax, Aussies have also been informed that by recording a net capital loss, a taxpayer has a right to a reduction on capital gains in the future.
Also, despite the fact that Australia had in February classified NFTs under the same category as cryptocurrencies, the recently released tax guideline now subjects the sale of NFTs to Capital gains tax every time it is sold at a profit.
On a brighter note, however, whenever cryptocurrencies are bought using Fiat as the means of payment, citizens of Australia are not required to pay tax off such purchase and when a purchased digital asset is held on to for at least one year, such individual is entitled to a 50% decrease in capital gains tax when the asset is finally sold.
Australia Widens Its Embrace of Cryptocurrency
In another recent development, the first set of crypto-focused Exchange Traded Funds (ETFs) has been debuted in Australia thereby granting citizens of the country wider access to holding Bitcoin (BTC) and other cryptocurrencies.
This development no doubt places Australia on the same pedestal as several other nations which have cryptocurrency-centered ETFs available for purchase.