Australia implements harsh anti-crypto tax laws.

[JuniAiko]

https://lets-talk.ato.gov.au/PAG/news_feed/consultation-substantiating-cryptocurrency-taxation-events
Every single trading of cryptos from one to another are now taxed, and cryptos are treated as an asset, rather than a currency.

By treating cryptos as a property/asset instead of a currency, Australia is effectively locking themselves off from becoming one of the leading crypto-tech countries. I expect startups and even big investors pulling their money out of Australia to more crypto friendly countries with less ridiculous taxation laws -- e.g. taxing only when cryptos is converted to/from fiat.

Update:
Here's one scenario why this tax policy should be considered harsh and impractical, and why big investors and crypto-startups should move their money out of Australia and look for elsewhere that are more supportive of crypto innovation and growth.

Purchase bitcoin (asset acquisition)
Trading consists of 2 steps.

Sell bitcoin (Capital gain event)
Purchase OMG (asset acquisition)
When you cash out

Withdraw to AUD 12 months later (capital gain event)
So you actually pay tax twice. More if OMG > BTC > AUD

This can be very problematic since you might have made a large profit at EOFY, but you've yet to cash it out into AUD. So you're left with a large tax bill, even if the following year your investment crashes to nothing.

[jseverson]

I could be missing something here, but isn't it basically just like US taxation?

Australia: https://www.ato.gov.au/general/gen/tax-treatment-of-crypto-currencies-in-australia---specifically-bitcoin/

US: https://www.irs.gov/pub/irs-drop/n-14-21.pdf

Basically, any instance of you divesting crypto is a taxable event if it was worth more than you paid it for; it doesn't matter if you sell it for fiat, other crypto, or trade it for goods/services. I haven't been keeping up with taxation around the world, but I usually don't hear anyone complaining about US crypto taxation. I always assumed that people thought it was fair enough (as far as how it's taxed anyway, not the fact that taxation exists), but I could be completely wrong lol.

[stompix]

Have you read the title?

Consultation: Substantiating cryptocurrency taxation events

They are juts taxing profits made from cryptos there are no anti-crypto tax laws.
Stop with the drama that they will be "locked out", the US is doing the same for years and it's not lagging behind in anything.

Also I salute the initiative of actually requesting feedback on how to do this.
Fewer and fewer countries are doing his lately unfortunately.

[CryptosGeek]

Well, don't you think it will affect demand? I believe it will be less people  interested in trading cryptos, well having experience with Australian market I have noticed that cryptos are decreasingly interesting for them.

[godzillarekt007]

Wow seriously good luck to all you Australian traders out there, sounds like a pain in the ass now. I wonder if they are doing this on purpose, almost to discourage getting involved in cryptocurrencies. Wouldn't be the worst idea, because literally everybody hates tracking that many trades.

[JuniAiko]

There are a lot of other smaller friendlier countries that investors and crypto-startups/companies can always move off to.
Binance have already done it. Hopefully more would follow.

[JuniAiko]

It may be good news with regards to acceptance of cryptos in Australia by the government, and especially since the tax laws encourages actual adoptive "use" of cryptos as payment options.
 
However the fact remains that developers can easily move their projects out of the country and base it elsewhere such as Singapore which do not have such hefty and tediously impractical tax policy imposed on traders and cryptos holders.

[Zagitta]

The crypto investors from Australia will just move their money into exchanges which don't require verification and are out of Australian jurisdiction. With cryptocurrencies being decentralized theres no way the Australian government will be able to find anyone using crypto.

[virendarnagpal]

There is difference between anti crypto law and  crypto regulatory law.  Anti law means if it is banned for transactions.  But regulatory means put some rules while transacting.  If they are taxing profits it is regulation only not anti.  All Governments require huge funds to run the country so nothing wrong in it.

[avikz]

I don't think Australian crypto community need to worry just as yet. This is a draft taxation guideline and nothing has been finalized yet. The Australian taxing authority is actually proposing this law and asking citizens to provide their feedback. While asking feedback is a good thing, but there are few areas in the proposed law, which are extremely worrying. Let me quote few of these below,

Where you exchange one cryptocurrency for another cryptocurrency, you dispose of one CGT asset and acquire another CGT asset. Where you receive property instead of cash as part of a transaction, you are usually taken to have received the market value in Australian dollars of the property received.

This essentially means, if you exchang your bitcoin for ETH, you will have to consider it as an acquisition of asset and needs to be termed in AUD.

So lets take an hypothetical example. Assume you have exchanged 1 BTC for 20 ETH. If 1 ETH is price at 400 AUD at the time of transaction, you are actually receiving 8000 AUD worth of asset. Now if tomorrow ETH price goes down to 300 AUD, will it be considered as a short term capital loss? No clear answer to that. Point of concern!

It does not matter how many exchange transactions you undertake. You need to undertake this process for every transaction occurring during the income year.

That means, you have to repeat the above described calculation every time you trade and convert the amount to AUD for record keeping. This law is unnecessarily complicating the matter and it will discourage a lot of active traders in Australia. However, the only hope is that, the law is still not enforced and the government is looking for public feedback on it.

[JuniAiko]

Some are wrongly assuming that this is about anti-taxation, but the criticism is against way it is implemented (just like here in the US)!
It is excessive, tedious, and impractical (see the scenario example that I have quoted under the OP).

The best and fairest way to tax cryptos is when the person converts cryptos back into fiat to collect %gain profits, and it could be calculated against the purchase price of BTC when they have entered from Fiat, etc.

[michkima]

This is expected. The governments will create anti-crytocurrency laws or laws that would extremely make it hard to use crypto for the reason that they are afraid of the technology and also that they are afraid that it could replace fiat currency which they cannot control. However, if the whole world wants crypto, what can the governments do. After all, power emanates from the people.

[easybtcearn2017]

This seems quite alike US taxation law to me. At some point we have to pay tax to Government. It’s our duty too. But if it turns into somewhat anti-Crypto law, then this is alarming. Hope, everything will be alright.

[Harlot]

Looking at how the tax is applied to trades, I don't think that the Australian government is against cryptocurrency. Like in my country, Philippines buying and selling stocks also has taxes and fees ranging from Value-Added Tax to Capital Gains Tax which I think is justifiable in our constitution. Also applying taxes won't necessary mean that they are against cryptocurrencies, simply not applying one in their trades would give an unfair treatment to the investors of the stock exchange.

[stompix]

This is expected. The governments will create anti-crytocurrency laws or laws that would extremely make it hard to use crypto for the reason that they are afraid of the technology and also that they are afraid that it could replace fiat currency which they cannot control. However, if the whole world wants crypto, what can the governments do. After all, power emanates from the people.

Probably you need to read the law again.

There is nothing against usage in this law, quite the contrary.
It will put some pressure on people that only use bitcoin as a speculation tool, just trading and caring only about the gains in fiat, with no real life usage.

What is anti-crypto ? Paying income tax?
You pay income tax also for gains in stocks so does it mean the government is anti stock markets?

[xhoondilan]

I think most of people do that to crypto, its because of the nonstable value of cryptocurrency thats why people used to make it as and asset rather than currency, imagine the price of crypto twice on the price you invested. That's why they take the chance on crypto to use it as a savings that grows when your keeping it.