Capital gains tax (CGT) is applied when a capital asset (such as cryptocurrency) is disposed of, and a capital gain or capital loss is made. The capital gain or loss is calculated as the difference between the acquisition cost of the asset and the disposal proceeds. For example, if you bought 1 bitcoin for $10,000 and later sold it for $20,000, you would have a capital gain of $10,000 which is subject to CGT.
Goods and Services Tax (GST) is applied to the supply of goods and services in Australia, including digital currency. While GST is not applicable for your normal Crypto trading transactions, if you’re engaged in Crypto Mining then you would liable for GST on Crypto transactions upon mining.
Keep in mind that, it’s important to keep records of all cryptocurrency transactions, as well as their values in Australian dollars at the time of the transaction so that you can accurately report any capital gains or losses. This includes when you acquire, dispose of, or hold cryptocurrency. These records should be kept for a minimum of 5 years.
It’s important to work with a tax professional familiar with the tax laws for cryptocurrency in Australia, to ensure compliance and minimize tax liability.
Our in-house Cryptocurrency Tax Accounting solution as Amaze Accounting would take away all your stress in Crypto Accounting and would complete your tax obligations with accuracy and efficiency. Just book a complementary appointment today to get started.