The Australian Taxation Office (ATO) announced today that it will prioritize crypto capital gains alongside three other key areas of focus this year to ensure appropriate tax reporting in the country.
ATO Says NFTs are Taxable
The ATO noted that all crypto assets, including non-fungible tokens (NFTs), disposed of for personal use, are subject to gains since the country treats these assets as digital properties.
The tax regulator said it is aware that many Aussies are investing in cryptocurrencies, hence investors are expected to calculate and report capital gains or losses from sales of crypto tokens and NFTs their tax returns this year.
“Through our data collection processes, we know that many Aussies are buying, selling or exchanging digital coins and assets so it’s important people understand what this means for their tax obligations,” Assistant Commissioner Tim Loh said.
The ATO also reminded investors to keep records of their transactions for reference purposes and that they cannot offset losses incurred from crypto investments with salaries or wages.
According to the regulator, crypto investors are having issues with filing their tax reports, hence the reason why the tax office has decided to prioritize it this year.
“The ATO is targeting problem areas where we see people making mistakes,” Loh added.
Crypto Taxation
As cryptocurrencies continue to make waves, countries around the world are moving to impose taxes on revenue from digital assets.
Last week, Germany joined a growing list of nations taxing crypto assets. The country’s Federal Ministry of Finance said crypto investors are not liable to pay taxes on bitcoin (BTC) and ether (ETH) held for at least a year. The new tax guidelines cover topics such as trading, staking, lending, hardfork, airdrops, and mining.
Earlier this month, Uzbekistan passed a law that exempts all cryptocurrency mining companies from paying taxes. The legislation also stated that mining firms can legally mine cryptocurrencies using the country’s electricity, although they will have to pay higher fees.
