A branch within the Australian Government, the Australian Taxation Office, shared plans this week to open a public consultation to gather people’s opinions on how the government should deal with the taxation of digital currencies.
However, the office currently has a policy in place called the Tax Treatment of Cryptocurrencies’ policy, so it is unclear what it intends to do if the public shares an opposing opinion about how the currency should be handled.
The initial policy says that if a person is involved in acquiring or disposing of cryptocurrency, he or she needs to know about the tax consequences. These will vary according to the nature of the person’s circumstances. Everyone involved in acquiring or disposing of digital currency must keep records in regards to their cryptocurrency transactions.
The policy discusses a variety of uses for cryptocurrency including investing, transacting, personal use, business use, exchanging and salary/wages. All digital currencies being used in this way have to be recorded for tax reasons. This includes the date of the transaction, the worth of the transaction and the reason for the transaction, along with the details of who it was for.
In regards to the Australian Taxation Office’s public consultation that has been announced, this following statement was released, “ 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.”
The consultation will remain open until the 20th of April, and citizens of Australia can voice any concerns they have up until that day. At this time, it is unclear what the Australian Taxation Office will do with the information.