Pay Capital Gains Tax to Trading Platform?
- Thread starter StephV
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I don't trade crypto but with any other situation where I've paid CGT (eg share trading) the money is paid directly to the ATO not any broker or other middleman.
You calculate the amount, put it on your Tax Return, the ATO then requests payment.
You calculate the amount, put it on your Tax Return, the ATO then requests payment.
So_Cynical
The Contrarian Averager
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Transacting with cryptocurrency - ATO Guide.
www.ato.gov.au
Tax treatment of crypto-currencies in Australia - specifically bitcoin
Our current view of the income tax implications of common transactions involving cryptocurrencies like Bitcoin.
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I do not think this is right, you might get it twice
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The GCT is added to your income and then taxed at the applicable rate.
Depending on your income and the gain, the CGT could range between $0 and ~50% of the gain.
How would they calculate the correct amount.
I could maybe expect them to notify the ATO that a CGT event has occurred in your trading.
Depending on your income and the gain, the CGT could range between $0 and ~50% of the gain.
How would they calculate the correct amount.
I could maybe expect them to notify the ATO that a CGT event has occurred in your trading.
Well, this is an interesting development (to me as someone with an interest in tax affairs).
The first thing I would do is to check with the ATO as to whether crypto exchanges are required to take part in the Tax Withholding system. If not, then I'd probably make a complaint about the crypto exchange direct to the ATO. They do act on complaints, even though in one particular case I know of, it took a couple of years for them to get off their butts. It was "complicated".
If crypto exchanges are part of the Tax Withholding system, then, if you didn't provide them with a tax file number, they may be required to withhold tax on any gains. This would be very similar to how the dividend system works if you don't provide a tax file number to the share registry before an unfranked dividend is paid. I would also check this with the ATO.
The interesting development, to me, is that if this withholding is legit, then we may see an attempt by a future federal government to introduce a similar withholding requirement on gains from share trades. There will be no problem, of course, if you provide your tax file number, but lets see how this develops.
Now, assuming that all this is legit, and the crypto exchange is required to withhold some form of tax:
When it comes to your tax time, a good tax agent will tell you that there is no capital gains tax payable, so you will receive a full refund of any withholding tax paid. You are merely transferring the same asset from one broker to another. You don't gain or lose, and the account name at the old crypto exchange is exactly the same name as the account name at the new crypto exchange. There is no beneficial change of ownership, so there is no capital gains tax, and anything you paid will be either refunded, or offset against other tax you owe.
Upshot is, first talk to the ATO, then go to a good tax accountant.
KH
The first thing I would do is to check with the ATO as to whether crypto exchanges are required to take part in the Tax Withholding system. If not, then I'd probably make a complaint about the crypto exchange direct to the ATO. They do act on complaints, even though in one particular case I know of, it took a couple of years for them to get off their butts. It was "complicated".
If crypto exchanges are part of the Tax Withholding system, then, if you didn't provide them with a tax file number, they may be required to withhold tax on any gains. This would be very similar to how the dividend system works if you don't provide a tax file number to the share registry before an unfranked dividend is paid. I would also check this with the ATO.
The interesting development, to me, is that if this withholding is legit, then we may see an attempt by a future federal government to introduce a similar withholding requirement on gains from share trades. There will be no problem, of course, if you provide your tax file number, but lets see how this develops.
Now, assuming that all this is legit, and the crypto exchange is required to withhold some form of tax:
When it comes to your tax time, a good tax agent will tell you that there is no capital gains tax payable, so you will receive a full refund of any withholding tax paid. You are merely transferring the same asset from one broker to another. You don't gain or lose, and the account name at the old crypto exchange is exactly the same name as the account name at the new crypto exchange. There is no beneficial change of ownership, so there is no capital gains tax, and anything you paid will be either refunded, or offset against other tax you owe.
Upshot is, first talk to the ATO, then go to a good tax accountant.
KH
Thank you, yes I was going to give the ato a call on Monday…
The following is what they wrote to me…
Attachments
Hello @StephV
The letter sounds official, but I would still call the ATO.
Try to find out the exchange's ABN before you call. The ABN should appear on any document that the exchange provides to you.
Edit:
Is this the Toronto Stock Exchange listed company that we're talking about? They may be quoting Canadian tax laws. In that case, they probably won't have an ABN. In that case, I would be contacting the Canadian tax office and see what the circumstances are.
Again, if it is legit, it will be just like you, as an Australian, working and paying tax in a foreign country. There is a tax treaty between Australia and Canada, so you should get a foreign tax offset for any tax paid on your next tax return.
KH
The letter sounds official, but I would still call the ATO.
Try to find out the exchange's ABN before you call. The ABN should appear on any document that the exchange provides to you.
Edit:
Is this the Toronto Stock Exchange listed company that we're talking about? They may be quoting Canadian tax laws. In that case, they probably won't have an ABN. In that case, I would be contacting the Canadian tax office and see what the circumstances are.
Again, if it is legit, it will be just like you, as an Australian, working and paying tax in a foreign country. There is a tax treaty between Australia and Canada, so you should get a foreign tax offset for any tax paid on your next tax return.
KH
Last edited:
Thank you so much for having a look at this for me. Yes, I will make a few phone calls.
I will l update you the outcome.
Much appreciated
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If a non Australian exchange,then discard my comments .
I gave no clue
Thank you though
