Failure to declare Crypto profits may incur high ATO penalties.
People who hold cryptocurrencies such as bitcoin, as an investment, are likely to receive a notification from the Australian Taxation Office if they fail to declare when they are sold at a profit.
In Australia Cryptocurrency transactions are subject to both Income and Capital Gains Taxes.
The Australian Tax Office (ATO) has announced that it is specifically targeting cryptocurrency traders, and that it has set out strict guidelines on how cryptocurrency buying, trading and mining is taxed.
The ATO has a data sharing program with all Australian digital currency exchanges, and consequently they have been receiving your transaction data in relation to trading, deposit and withdrawal history.
Cryptocurrency trading is not as anonymous as many people think.
In 2020, 350,000 Australian crypto investors were given 28 days to disclose their crypto trades, without penalties.
In 2021, the ATO may not be as lenient on giving that opportunity to disclose in arrears.
You have until 31 October each year to supply your tax return including your crypto trades for the year 1 July to 30 June.
Income tax is payable on the market value of any cryptocurrency that you have created (mined).
Tax is also paid on any profit when selling any crypto that you have mined or bought.
The complexity of this means I suggest using an expert service or at least something like this: koinly.io/guides/crypto-tax-australia/