The Australian Tax Office has ruled that crypto-currencies should be treated as an asset for income tax purposes. Bitcoin (or other crypto-currencies) should be treated an asset for capital gains tax (CGT) purposes.
You would need to keep the following records of your crypto transactions:
- the date of the transactions
- the amount in Australian dollars (which can be taken from a reputable online exchange)
- what the transaction was for
- who the other party was (even if it’s just their bitcoin address).
Where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.
Bitcoin held by a taxpayer carrying on a bitcoin exchange will be considered to be trading stock. You are required to bring to account any bitcoin on hand at the end of each income year.
If you have acquired bitcoin as an investment, but you are not carrying on a business of bitcoin investment, you will not be assessed on any profits resulting from the sale or allowed any deductions for any losses made. If your transactions amount to a profit-making undertaking or plan then the profits on disposal of the bitcoin will be assessable income. Capital gains tax may apply to personal transactions.
Source: https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia—specifically-bitcoin/
