Cryptocurrency: potential $1.5 billion in ATO tax from bitcoin, ethereum and binance profits

Cryptocurrency: potential $1.5 billion in ATO tax from bitcoin, ethereum and binance profits

Is your brother-in-law, who likes to brag about the amount of money he’s made in Bitcoin, one of the potential 300,000 Australians who have yet to report the cryptocurrency to the ATO?

If so, it could be contributing an astonishing amount of potentially more than $1.5 billion undeclared. crypto- snow Australian Taxation Office.

What’s even more worrying: $1.5 billion is on the very cautious end of what that amount might actually be, according to a simple calculation using reliable data.


Crypto tax software company Koinly has shared some recent survey findings, with around 1.5 million Australians dealing with crypto potentially being around 200,000-300,000. hasn’t reported his cryptos yet to the ATO.

Australian-based cryptocurrency exchange Swyftx revealed in its latest report that 72 percent of Australians investing in crypto earned an average of $11,013 from their investments last year.

Even if we use the bottom line of these statistics, 72 percent of the 200,000 people are 144,000, the number of people we can estimate made an average of $11,013 in profit.

Let’s take those 144,000 people and be conservative assuming they don’t make more than $11,013 on average, which still equates to over $1.5 billion. crypto profit not reported to the tax office.

The total amount not reported to the ATO could be significantly higher, given the fact that many Australians earn more than average returns of $11,013.

Why is it important to report your crypto?

You’re probably wondering why it matters whether I report my crypto or not.

Simple answer: ATO already knows you own crypto.

A spokesperson for the tax office said that although the cryptocurrency appears “anonymous”, the ATO can track money trails to taxpayers through data from banks, financial institutions and online crypto-asset exchanges.

Koinly Australia head of tax Danny Talwar described the ATO data matching program as “extensive”, finding “abnormalities” reported in tax returns when compared to data from various institutions.

If the ATO is looking for more information, they can request it directly with the respective cryptocurrency exchange.

Leigh Travers, CEO of cryptocurrency exchange Binance Australia, explained that Binance complies with all regulatory requests issued under “applicable legislation” from law enforcement and regulators.

While the ATO allows them to “modify” their tax returns by understanding those who make real mistakes, those who deliberately do not report or choose not to “take action” after identifying errors or omissions may be subject to audit.

When is your crypto taxable?

The biggest myth is that crypto investors only have to pay taxes when they convert their crypto to Australian dollars.

The truth is, you are obligated to report all cryptocurrencies you dispose of during the financial year, regardless of whether you have cashed out or made a gain or loss. These divestments include exchanging one crypto asset for another, using crypto to buy goods and services, and even gifting crypto.

Mr. Talwar added that it is important to consider whether they make a gain or loss on the disposal of their crypto assets, because their crypto is taxed at the applicable individual marginal income tax rate.

However, crypto isn’t just limited to capital gains tax – it may also be subject to regular income in some cases.

If you stake your crypto and earn interest or rewards as a result, this is normal income and you should add this amount to your taxable income.

Mr. Talwar said that cryptocurrency is taxed as ordinary income when it is received, not when it is disposed of; for example, any interest or equity arising from income generating activities.

take away

The truth is that if you hold cryptocurrency on a cryptocurrency exchange, not only the ATO will know, but usually your accountant as well. When they go to fill out your tax return that you own the cryptocurrency, they will show up on your prefill and advise them to check with their clients.

Mr Travers believes Australians have a “responsibility” to submit a true and accurate tax return, suggesting that crypto traders who are unaware of their tax obligations should amend their tax returns to accurately reflect this.

There is a wide variety of crypto tax software out there that can help simplify this process for you without spending your entire weekend entering data into a spreadsheet.

The next time your brother-in-law is talking about making 100x on his most recent bitcoin investment, ask him if he reported it to the ATO, tell him to download a crypto tax calculator, and send him the link to this article.

Ciaran Lyons is an accountant and avid crypto investor with a background as a national radio host. She is a regular contributor to global cryptocurrency broadcasts and was one of five Australians on the most recent SBS series, Filthy Rich and Homeless.

Read related topics:Cryptocurrency Tax Period

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