Wednesday, November 20

Invested in crypto? Chat to your accountant and your crypto service provider!

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According to Ajeet Khurana, global CEO for Zebpay, one of the world’s largest cryptocurrency exchanges, “A lot of people want to know whether they should talk to their accountant or tax advisor about their crypto investments! Our simple answer is yes.”

“We say yes for a number of reasons, the most important one being that crypto is recognised as the third investment sector or asset class. Our view is that anything that changes or has the potential to change your financial circumstances should be included in your tax affairs. These are issues you definitely need to discuss with your tax advisor.”

While Australia isn’t the biggest market in the world for Bitcoin and other cryptocurrencies, it is a relatively fast growing one. As at last year, Australia ranked 14th globally for Bitcoin volume by currency.   

The Australian Tax Office (ATO) has estimated that there are between 500,000 to one million Australians that have invested in crypto-assets.  In response, the ATO has announced increased scrutiny for these taxpayers and will be working with Designated Service Providers (DSP’s) such as cryptocurrency exchanges to collect data and help taxpayers get it right and are paying the right amount of tax. 

“The benefit for taxpayers is that regulatory authorities are helping to provide certainty on cryptocurrency as an asset class and this will further enhance its standing as an attractive alternative for investment alongside both shares and property,” Ajeet added. 

“As 2019 tax time looms from July 1, this is the ideal time for anyone who has invested in crypto-assets such as Bitcoin, Ethereum or many other crypto-assets to speak to their accountant or registered tax agent to discuss if they owe any Capital Gains Tax (CGT) or not. 

“The accountant or registered tax agent will need to understand from the DSP data whether there has been a CGT event or not.”

In general, cryptocurrencies are considered property for tax purposes in Australia.   The following general information is based on ATO guidelines. A CGT event occurs when you dispose of your cryptocurrency.   A disposal can occur when you:

  • Sell or gift cryptocurrency
  • Trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)
  • Convert cryptocurrency to fiat, currency (such as Australian dollars) or use cryptocurrency to obtain goods or services.

“If you make a capital gain on the disposal of cryptocurrency, some or all of the gain may be taxed. Certain capital gains or losses from disposing of a cryptocurrency that is a personal use asset are disregarded,” Ajeet explained. 

“If the disposal is part of a business you carry on, the profits you make on disposal will be assessable as ordinary income and not as a capital gain.”

While a digital wallet can contain different types of cryptocurrencies, each cryptocurrency is a separate CGT asset.   If taxpayers are Australian residents for tax purposes and hold cryptocurrency for more than 12 months before it is used or sold then they may be eligible for a capital gains discount up to 50 per cent. 

Taxpayers should contact their DSP’s during tax time and obtain statements on their transactions which has information to help calculate the right amount of tax. There are specialist tax calculators and advisory firms who can assist with this process.    

“As one of the world’s largest incident free crypto exchanges, we very much see our role as assisting to educate people about the benefits and responsibilities of crypto and providing access to purchase crypto in a safe, secure and easy to use platform,” Ajeet added.  

“Since Zebpay’s arrival to Australia in May this year, the Zebpay leadership team has been proactively working with Australian regulators and others to explore and address regulatory and other issues in Australia to support the growth of the crypto sector and all those investing in crypto.” 

Zebpay has already demonstrated its innovative edge by becoming one of the first bitcoin exchanges in the world to offer batched transactions and was the first global exchange to support Lightning Network withdrawals. 

The product features available to users in Australia include: 

  • Instant buy and sell of cryptos across five trading pairs, 
  • Bitcoin Lightning Network withdrawals,
  • Multiple payment integrations available, allowing consumers to make bank transfers and wallets to bring fiat to their Zebpay account,
  • No fees for Fiat deposit and withdrawal; and
  • A welcome offer: AU $30 bonus on crypto purchases worth AU $100 or more
  • SMSF’s can trade on Zebpay from July 1

“Our deep-rooted commitment to advancing the crypto-community, for everyone, is evident in all aspects of Zebpay’s business,” Ajeet added. 

“We believe inclusion and accessibility is the best form of expansion. The range of features available ensure that all Australians are able to buy and sell cryptocurrencies, as well as understand them.   We want all Australians to know that we are the ‘go to’ place to buy and sell crypto with ease because we are safe, forward thinking, reliable, trustworthy and highly capable.

“Zebpay’s arrival to the Australian market is perfect timing for Australians who are looking for an alternative to the property sector and the share market – and we believe crypto is going to grow significantly as a result.”

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