Cryptocurrency – What’s the big deal?

This is an area of significant growth and focus of the ATO at the moment. The tax perspective differentiates treatment depending on the use of this currency.

Should you invest in Bitcoin and use it to pay for goods and services of a personal nature for transactions under $10,000, there are no tax implications. A personal exemption will apply in such cases. For transactions of this nature that are $10,000 and over, capital gains tax (CGT) will apply. The value of the Bitcoin at time of purchase and disposal will determine the CGT calculation.

If you are a business owner who is paid in Bitcoin, this must be declared as ordinary income. Should you run a business of buying and selling Bitcoin or oversee such acquisitions and disposals, the Bitcoin is considered to be trading stock. Proceeds of this activity must be declared, as can any associated expenses.

If you play in cryptocurrent in any field, get in touch with us at Nexis on 6264 8000. Keep an eye out for more from us, here at Nexis on the ATO progression with their approach to cryptocurrency.

Find out more about crypto currency from the ATO.

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