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Author Topic: Australia implements harsh anti-crypto tax laws.  (Read 92 times)
JuniAiko
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March 29, 2018, 02:27:55 PM
 #1

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.

Quote
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.

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March 29, 2018, 02:35:47 PM
 #2

would you mind explaining how is it "harsh and anti-crypto" tax laws when Australia considers cryptocurrencies as an asset and wants capital gain taxes on them but i have never heard anyone complaining when same laws apply to bitcoin in a lot of other countries like US for example where IRS have been doing the same ever since 2014?

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March 29, 2018, 03:05:06 PM
 #3

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

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March 29, 2018, 03:22:58 PM
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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.


How can you track transactions between bitcoin users? It's unrealistic. In fact, you will pay taxes only after you sell cryptocurrency for Fiat. Now we see a tendency to move cryptocurrency business to offshore jurisdictions. Maybe we will pay a minimum percentage of the tax for opening an account in these countries and after that we will make a transfer to your country. No one will force you to pay taxes twice.
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March 29, 2018, 03:58:14 PM
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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.


How can you track transactions between bitcoin users? It's unrealistic. In fact, you will pay taxes only after you sell cryptocurrency for Fiat. Now we see a tendency to move cryptocurrency business to offshore jurisdictions. Maybe we will pay a minimum percentage of the tax for opening an account in these countries and after that we will make a transfer to your country. No one will force you to pay taxes twice.

The Australian Government may intend on regulating the exchanges or trading platforms so that they could keep track of the transactions. I'm betting that this is going to discourage most of the crypto users there from exchange their bitcoin to fiat, and they will probably just opt to hold their BTC. However, I think that businesses and startups may still exist despite that they have imposed taxes. This won't hinder the investors, they may be willing to since it only concerns transactions converting to and from fiat.
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March 29, 2018, 03:58:58 PM
 #6

This is not a bad issue about crypto business, and when government collects taxes from crypto business it is something that government has a final approval and endorsement in their country, the bad issue only when government or a certain country banned crypto business. And those only transactions can be collected a taxes when cryptocurrencies are converted into fiat or a real paper money, so difinitely all transaction with direct payment of digital cryptocurrency can no longer collected a taxes.

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March 29, 2018, 04:14:31 PM
 #7

It may be good news with regards to acceptance of cryptos in Australia by the government.
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.

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March 29, 2018, 04:50:59 PM
 #8

It may be good news with regards to acceptance of cryptos in Australia by the government.
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.

I think so too. It's better that they're trying to somehow fit it into their laws. It means they're recognizing it and, allow people to use it, unlike some unstable countries scared of their own shadow, like Venezuela. It's not the best approach, but it's also not the worst. The worst would be banning it, but ignoring it also wouldn't look good. BTC was called nerd money and treated like a trading token for children long enough.
Let's not call it bad news, just yet. It's a step into the worldwide acceptance.

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March 29, 2018, 05:18:10 PM
 #9

It's exactly the same as UK tax treatment by the looks of things.

They treat Bitcoin as foreign currency which has always been subject to capital gains. Crypto to crypto trades are considered a disposal so are taxable too.

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March 29, 2018, 05:45:48 PM
 #10

It's exactly the same as UK tax treatment by the looks of things.

They treat Bitcoin as foreign currency which has always been subject to capital gains. Crypto to crypto trades are considered a disposal so are taxable too.

What's the situation in the UK, I understand the capital gains part but how does it work with taxes on any transaction that is crypto to crypto? The capital gains part of this is completely normal and is pretty much universal in all of the major world economies.

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March 29, 2018, 05:49:34 PM
 #11

What's the situation in the UK, I understand the capital gains part but how does it work with taxes on any transaction that is crypto to crypto? The capital gains part of this is completely normal and is pretty much universal in all of the major world economies.

By going crypto to crypto you're realising a gain, that is of course if you actually gained. So 50c ETH used to buy BTC these days will be taxed the same as if you sold it to GBP and bought the BTC with that. It's not unique to crypto by any means.

It's now been clarified in the USA and it's the same setup.

In truth I doubt the British tax man gives a shit. They're not the IRS. I'll be sticking with crypto to fiat payouts only if I can ever be bothered to pay any tax.

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March 29, 2018, 06:15:22 PM
 #12

would you mind explaining how is it "harsh and anti-crypto" tax laws when Australia considers cryptocurrencies as an asset and wants capital gain taxes on them but i have never heard anyone complaining when same laws apply to bitcoin in a lot of other countries like US for example where IRS have been doing the same ever since 2014?
I also think that regulation and tax implementation is actually a good thing. It allows a person to feel safe and behave legal with cryptocurrencies. The system doesn't ask the impossible. It acknowledges that only addresses need to be known and that no person identification is available. It simply asks to keep record of the transactions and then pay taxes for them per year. The system is sophisticated, however. But these are the first steps that lead to official acknowledgement of cryptocurrencies as means of payment.

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March 29, 2018, 07:41:39 PM
 #13

What's the situation in the UK, I understand the capital gains part but how does it work with taxes on any transaction that is crypto to crypto? The capital gains part of this is completely normal and is pretty much universal in all of the major world economies.

By going crypto to crypto you're realising a gain, that is of course if you actually gained. So 50c ETH used to buy BTC these days will be taxed the same as if you sold it to GBP and bought the BTC with that. It's not unique to crypto by any means.

It's now been clarified in the USA and it's the same setup.

In truth I doubt the British tax man gives a shit. They're not the IRS. I'll be sticking with crypto to fiat payouts only if I can ever be bothered to pay any tax.

I always just thought that the easiest and most accurate way would be a simple money out - money in calculation. That shows the gain. I don't know how things like bounty campaigns would be accounted for, I guess they would be income instead of capital gains, or even income on the initial value and capital gains if you held it and it increased Huh

But so in your example, you buy 1 btc at $100, sell it for eth when btc price is $1000 and eth is $100, so now you have 10 eth, you'd pay tax at that point on $900 earned? What about if later you sold the eth for $1000 each. You'd pay further tax on the full $10k or just on the $9000 profit which hasn't already been taxed?

Hopefully I'm understanding that correctly. If so it seems no different to paying tax on conversion of crypto to fiat, just with more steps involved.

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March 29, 2018, 10:41:00 PM
 #14

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.

I'm sorry to say this as australians are cool people. But australia is a shady country. Their government could be far more corrupt than its given credit for. If you want an example of this... has anyone noticed how unbelievably slow some australians internet connections are on multiplayer games? There is a very good chance australia's government secretly set up an internet filtering and monitoring system which kills internet connectivity. Similar to china's "great firewall".

Historically australia had good internet connectivity. Then during a time when the government began discussing internet censorship, australians suddenly saw their pings increase by a huge factor. It was blamed on an undersea telecom cable being "damaged". But given that high pings remained even after the cable was repaired the more likely explanation may be that australia's government secretly set up an oppressive internet surveillance and censorship regime.

There was also australia's controversial gun ban program, which some might say was unsuccesful. Long story short, don't be surprised if there are more nefarious policies coming out of australia. People in australia are cool but their politicians might not follow the same precedent.

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March 30, 2018, 01:42:38 AM
 #15


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.


How can you track transactions between bitcoin users? It's unrealistic. In fact, you will pay taxes only after you sell cryptocurrency for Fiat. Now we see a tendency to move cryptocurrency business to offshore jurisdictions. Maybe we will pay a minimum percentage of the tax for opening an account in these countries and after that we will make a transfer to your country. No one will force you to pay taxes twice.

The Australian Government may intend on regulating the exchanges or trading platforms so that they could keep track of the transactions. I'm betting that this is going to discourage most of the crypto users there from exchange their bitcoin to fiat, and they will probably just opt to hold their BTC. However, I think that businesses and startups may still exist despite that they have imposed taxes. This won't hinder the investors, they may be willing to since it only concerns transactions converting to and from fiat.
Then the solution is very easy we need to avoid exchanges, governments think that with enough laws and regulations that they are going to be able to dominate the market but we know that is simply not true just look at software piracy there have been many attempts to try to bring it down and still it doesn't stop, so at the end it doesn't matter what laws they pass bitcoin users will always find a way around them.
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March 30, 2018, 01:59:26 AM
 #16

Actually it's not possible to track the bitcoin transaction.This is one of main advantage of bitcoin over other crypto currency.I don't know how you are saying this ,it was tracked and you forced to pay the tax.Only by the bank transaction,they may ask the source for transaction.

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March 30, 2018, 02:18:09 AM
 #17

Its not anti-crypto when it all does is implementing taxation for the country fairness. Does the crypto user must have an exemption? Is it fair to those who paying they’re tax working on daily basis.

Learn not to be selfish, if we wanted to be recognized as a legitimate community why not share the blessing we received. I’m supporting anything when it comes to regulation.
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March 30, 2018, 06:14:03 AM
 #18

Its not anti-crypto when it all does is implementing taxation for the country fairness. Does the crypto user must have an exemption? Is it fair to those who paying they’re tax working on daily basis.

Learn not to be selfish, if we wanted to be recognized as a legitimate community why not share the blessing we received. I’m supporting anything when it comes to regulation.

You are 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.

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