Over the years, Australia has been one of the top countries in the world to consistently promote the idea of cryptocurrency and Bitcoin. Adoption is a key factor for the general growth of virtual assets, with Australia playing a crucial role towards the wider adoption of crypto-assets.
Further, it was also recently reported that the world’s first Bitcoin ETF may soon be launched by an Australian Accounting firm, BDO.
However, according to Micky.com, crypto-investors based out of the country are being made to pay massive taxes on their virtual assets by the Australian Taxation Office’s crypto-tax regulations. Apparently, the taxes so paid are higher than the investment made on the crypto itself.
Adrian Forza, Director of Crypto Tax Australia, stated that one of his clients had to cough out a massive $100,000 in taxes for assets worth only $20,000. The situation arose because according to the rules of the Australian Taxation Office [ATO], the value of the virtual assets have to be declared at the time of the person receiving it.
Forza’s client had declared the value back in January 2018, when he received the crypto for some development work he carried forward in an overseas company. At the time of declaration, the cryptos were worth $250,000. However, they were worth just $20,000 when the tax bill surfaced.
Forza declared the situation an absolute “disaster.”
“That’s a really unfair outcome because he’s basically received cryptocurrency and the value has dropped significantly and now he has to pay tax on money he doesn’t have. This is something they will have to change as it is unfair.”
Forza further suggested that it was necessary that crypto tax rules in Australia had “greater clarity” for profits made around through investing or mining crypto. According to Forza, the correct understanding of crypto-tax laws and their implementation was a major hurdle for crypto-investors.
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