Updated

January 30, 2018 16:32:21 Regulators are playing catch-up when it comes to the brave new evolving world of cryptocurrencies. The Australian Taxation Office believes bitcoin, ripple, ethereum and hundreds of other digital currencies are “a form of property”.

“Any financial gains made from the selling of bitcoin will generally be subject to capital gains tax (CGT) and must be reported to the ATO,” a spokesperson from the tax office said. But this remains a grey area that is yet to be tested in a court of law.

Until that happens, the ATO has advised cryptocurrency owners to keep good records of their intentions, transactions, and who received payments. It might be wise to heed that advice, given the tax office has warned it will be looking out for tell-tale signs of crypto tax dodgers living beyond their means.

“The ATO is here to help those that are genuinely trying to meet their tax obligations,” the spokesperson said. “However, where people attempt to deliberately avoid these obligations, we will take strong action.”

This includes using “a range of existing powers” which are used to address “unexplained wealth and conspicuous consumption that may arise through profits derived from cryptocurrency investment”. One of Australia’s leading tax experts has warned that many investors mistakenly think their cryptocurrency profits are tax-free. Read more from abc.net.au…

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