This week the Australian Taxation Office, a branch within the Australian Government have announced plans to open a public consultation in order to gain opinions on how the government should handle the taxation of cryptocurrencies. This perhaps suggests to me that Australia’s government are open to totally free cryptocurrency operations but want to see if the public agrees with them first, a very democratic move indeed. Interestingly though, they do already have a policy in place known as the ‘Tax Treatment of cryptocurrencies’ policy, therefore its doubtful that they would go back on themselves if the public said otherwise, surely? The initial policy outlines that:
If you are involved in acquiring or disposing of cryptocurrency, you need to be aware of the tax consequences. These vary depending on the nature of your circumstances. Everybody involved in acquiring or disposing of cryptocurrency needs to keep records in relation to their cryptocurrency transactions.
The policy covers a number of uses for cryptocurrency including transacting, investing, personal use, business use, exchanging and salary/wages. Any instances of cryptocurrencies being used in this way must be recorded for tax purposes, this includes the date of the interaction, the value of the transaction and the purpose of the interaction/details of who it was for. In their latest move, the establishment of a public consultation, according to CCN the Australian Taxation Office have released the following statement:
“The purpose of this consultation is to seek feedback on practical compliance issues arising from complying with taxation obligations in relation to cryptocurrency transactions. In particular, we are interested in any practical issues that may impact on taxpayers’ abilities to calculate and substantial any capital gains and losses for capital gains tax (CGT) purposes.”
It seems that they have reviewed their current policy and might deem that actually the workflow is too much. The consultation is live until the 20th of April, citizens of Australia have until this date to air any concerns they may have. After this date, how the Australian Taxation Office will respond is a mystery. As I have mentioned however, perhaps they are open to lifting some aspects of this policy, maybe in light of cryptocurrency adoption becoming a much more realistic concept of recent months? In October 2017, Australia lifted a double taxation law that hampered cryptocurrency transactions in the country, maybe this public consultation is another step in the right direction to reduce the pressure on traders and investors in an attempt to divert some more cryptocurrency traffic into the country. Featured Image Source: PixabayInvestment Disclaimer