The ATO has announced after public consultation the ATO has updated their guidelines on tax treatment of crypto-currencies. The ATO’s guide on the ATO website now states:
“The term crypto-currency is generally used to describe a digital asset in which encryption techniques are used to regulate the generation of additional units and verify transactions on a blockchain. Crypto-currency generally operates independently of a central bank, central authority or government.
The creation, trade and use of crypto-currency is rapidly evolving. This information is our current view of the income tax implications of common transactions involving crypto-currency. Any reference to ‘crypto-currency’ in this guidance refers to Bitcoin, or other crypto or digital currencies that have the same characteristics as Bitcoin.
If you are involved in acquiring or disposing of crypto-currency, 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 crypto-currency needs to keep records in relation to their crypto-currency transactions.
If you have dealt with a foreign exchange and/or crypto-currency there may also be taxation consequences for your transactions in the foreign country.”
For the ATO guidelines go to https://www.ato.gov.au/general/gen/tax-treatment-of-crypto-currencies-in-australia—specifically-bitcoin/
The ATO also provides guidelines on the following:
- SMSF investing in crypto-currencies
- GST and digital currency
- transacting with crypto-currency
- Crypto-currency in business
- record keeping
- additional information
See also ASIC’s Money Smart website that has useful information on the risk involved in investing in crypto-currencies.