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Australia has confirmed that cryptocurrency transactions are taxed as assets, not as foreign currency. according to Applies to Budget 2022-23, released October 25. Existing crypto profit tax discounts also apply.
However, the budget document clarifies that government-issued digital currencies or central bank digital currencies (CBDCs) will continue to be taxed as foreign currency.
With the digital currency tax imposition, the Australian government will introduce legislation that will require investors to pay capital gains tax (CGT) on profits made by selling or trading cryptocurrencies through centralized exchanges. is. The decision removes the uncertainty that could follow the conclusion that the government of El Salvador will adopt bitcoin as legal tender, according to budget documents.
The digital currency tax law under development dates back to income years including 1 July 2021.
The Australian Taxation Office (ATO) now requires Australian-based cryptocurrency investors to report capital gains and losses on their income tax returns. This gives you a 50% CGT discount if your assets are held for at least 12 months.
Additionally, according to the ATO, a GCT transaction is a transaction in which an investor sells, gives away, or trades a crypto asset, another crypto asset, or fiat currency, converts crypto to fiat currency, or converts crypto assets into goods or services. subject to capital tax if spent.
The Reserve Bank of Australia (RBA) is currently testing a pilot investigating wholesale and retail use cases for e-AUD and how to develop it. The selected use cases will be announced on December 31, 2022, and the e-AUD pilot to operationalize the CBDC use cases is scheduled to run from January 2023 until he April.
Australia’s crypto regulatory framework is still in the early stages of development after the Senate released a report detailing recommendations for the crypto industry in 2021. This includes a CGT regime that clearly defines capital gains and losses in cryptocurrency trading, and a token mapping exercise to determine. How best to articulate different types of crypto-assets, and the establishment of a new decentralized autonomous corporate structure, among other recommendations.
In August 2021, the Treasury Department announced plans to launch a token mapping exercise, as recommended by the Senate, as one of the first steps in shaping Australia’s regulatory landscape.
