Taxation of Bitcoin and Cryptocurrency

In the last 52 weeks Bitcoin has been trading anywhere between USD$9,916 and USD$64,863.  No wonder it has gained immense popularity.

Tax law refuses to classify crypto as a foreign currency for income tax purposes, despite it being classified as money for GST purposes.

For income tax purposes crypto is treated like property and taxed as a CGT asset.

The only exception to this is if it is acquired and then used within a short amount of time to purchase goods or services.

With El Salvador making Bitcoin an official currency in September 2021, it will be interesting to see how Australian tax law reacts to this with it potentially becoming taxed under Foreign Exchange rules as more countries adopt it.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

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