Australia: Cryptocurrencies not regarded as foreign currency for tax purposes

Capital gains tax will continue to be applied to cryptoassets that are held as investments.

Capital gains tax will continue to be applied to cryptoassets that are held as investments

The Australian government will continue to exclude cryptocurrencies from foreign currency tax arrangements.

According to a statement (22 June 2022) from the Assistant Treasurer:

A decision by the Government of El Salvador to allow Bitcoin as legal tender has the potential to create uncertainty about the status of crypto assets such as Bitcoin for tax purposes in Australia.

The Government will therefore move to clarify current arrangements in legislation that will mean crypto assets will not be regarded as a foreign currency for tax purposes.

Accordingly, while cryptoassets will not be regarded as a foreign currency for tax purposes in Australia, capital gains tax will continue to be applied to cryptoassets that are held as investments. The government’s latest clarification will be backdated to 1 July 2021 to deliver a consistent tax requirement for cryptoasset holders.

 

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