Australian Tax Authority issues warning for crypto and NFT sellers

The Australian Taxation Office (ATO) has released a warning regarding capital gains when selling digital assets.

The sale of a token is similar to the sale of any shares, property or other assets. Taxes on non-fungible tokens (NFTs) and digital tokens have recently been a cause for concern for the taxman.

With the collapse of Terra, cryptocurrencies have taken a hit and a dip in market value. ATO assistant commissioner Tim Loh reminded those offloading digital assets that “you can’t offset your crypto losses against your salary and wages”.

“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”, he continued.

As mentioned in the ATO’s guidelines, a taxpayer is entitled to a reduction in future capital gains when recording a net capital loss. However, this does not apply to any of their other income.

In February, the tax authority put its rules in place to explain that the same principles will apply to NFTs as to cryptocurrencies. The ATO’s release reminded crypto investors that NFTs are included when considering tax and if sold for profit then the tokens will be subject to capital gains tax.

A month later in March, a licensing system surrounding introducing crypto exchanges was consulted on with responses welcome until May 27.

Australia already has several crypto investors with more than 800,000 owning crypto assets, according to the country’s treasurer Josh Frydenberg.

Like many others leaning toward crypto, the Australian government vows to “bring the sector “out of the shadows” with a regulatory framework surrounding cryptocurrencies that hope to become “world-leading”.

If you want to use crypto for recreational purposes, you can do so at Bitcasino, 1xBit or FortuneJack.

 

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Updated: 05/16/2022 — 15:00