With cryptocurrency becoming more mainstream, many businesses are starting to explore its use for investment, transactions, or accepting payments. But how does the Australian Taxation Office (ATO) treat crypto, and what are the tax implications for your business?
Here’s what business owners need to know:
1. Cryptocurrency is Treated as Property, Not Currency 📊
The ATO considers cryptocurrency to be a form of property or asset, not foreign currency. This means capital gains tax (CGT) rules apply when you dispose of crypto—such as by selling it, trading it, using it for purchases, or converting it to fiat currency.
2. Business Transactions Must Be Reported 🧾
If your business receives cryptocurrency as payment for goods or services, it must be included in your assessable income. The value should be recorded in Australian dollars at the time of the transaction and reported in your BAS if you are registered for GST.
3. Crypto-to-Crypto Trades Are Taxable 🔄
Even if you’re not converting to AUD, swapping one cryptocurrency for another is still considered a taxable event. You’ll need to record the market value in AUD at the time of the trade to calculate gains or losses.
4. Record-Keeping is Crucial 📁
The ATO requires detailed records for all crypto transactions. This includes dates, values in AUD, wallet addresses, and the purpose of each transaction. Using crypto-tracking software can simplify this process.
5. CGT and Trading Stock Considerations 💼
Crypto held as part of your business operations may be treated as trading stock rather than a capital asset, particularly for traders or businesses that buy and sell crypto regularly. This affects how your gains are taxed.
💡 Navigating crypto tax can be complex. We help business owners stay compliant and plan effectively for tax time—whether you’re investing in crypto or accepting it as payment. Let’s chat about how to manage your crypto transactions with confidence.
