Loading
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
Sc927_JN(Initiate)Initiate
3 Sept 2021

Hi,

I recently opened a forex copy-trading account with a broker based in Singapore and had some questions on the overall tax topic.

Firstly when funding my account, I send AUD to my Binance wallet and from here convert it to Tether, (USDT) a stable coin. My broker will then convert it to USD currency so i can trade.

The trading account is a copy-trade account where I keep 75% of all profits. For example if I make $US1000, I will lose $US250 to profit sharing, with an overall profit $US750.With all this in mind, is that profit sharing taxable, I.e. the 250 that automatically gets taken out of my account, taxable?

Also, would I have to pay tax in Signapore and Australia for the overall profits made?

Lastly, when I do withdraw profits:

1. I send the USD to my Binance Wallet

2. It appears as USDT

3. Convert it to AUD

Does this process, moving USD to a stable coin and then to AUD involve any further tax ?

Thank you for your time, and I hope what I said was clear to understand.

2,186 views
3 replies
2,186 views
3 replies

Most helpful response

Most helpful reply

AriATO(Community Support)Community Support
7 Sept 2021

Hi @Sc927_JN

Do you know if you're trading CFD's?

The $US1000 is considered income for you and if the $US250 is a type of fee then you could claim a deduction for it.

When you buy Crypto then you sell, trade or exchange it then thats a Capital Gains Tax (CGT) event.

Therefore when you convert the stable coin to AUD, you need to work out your capital gain or loss from that event. This is essentially the difference between what you paid for the coin and what you received. Your proceeds in this situation is the market value of the coin at the time you converted it to AUD. Your cost base includes what you paid for the coin and any other associated costs/fees.

The situation is the same when your broker converts the stable coin to USD. That's also a CGT event where you need to work our your gain or loss.

You'd need to check if tax is payable in Singapore. Assuming you're an Australian resident for tax purposes you'll declare your income on your return and if you've paid tax overseas you maybe entitled to claim a Foreign income tax offset.

All replies

Most helpful reply

AriATO(Community Support)Community Support
7 Sept 2021

Hi @Sc927_JN

Do you know if you're trading CFD's?

The $US1000 is considered income for you and if the $US250 is a type of fee then you could claim a deduction for it.

When you buy Crypto then you sell, trade or exchange it then thats a Capital Gains Tax (CGT) event.

Therefore when you convert the stable coin to AUD, you need to work out your capital gain or loss from that event. This is essentially the difference between what you paid for the coin and what you received. Your proceeds in this situation is the market value of the coin at the time you converted it to AUD. Your cost base includes what you paid for the coin and any other associated costs/fees.

The situation is the same when your broker converts the stable coin to USD. That's also a CGT event where you need to work our your gain or loss.

You'd need to check if tax is payable in Singapore. Assuming you're an Australian resident for tax purposes you'll declare your income on your return and if you've paid tax overseas you maybe entitled to claim a Foreign income tax offset.

  • Avatar of woman with short blond hair
Liked by Sc927_JN
Sc927_JN(Initiate)Initiate
7 Sept 2021

Hi,

Thank you for your time, that has clarified many things for me.

To answer your question,

No, I stricty trade forex. Does that alter anything you already have stated?

Also, in regards to tax in Singapore, does the "The Singapore-Australia Double Tax Treaty" cover income derived from forex trading, and if so do you know or could you clarify?

Again thank you for your time

AriATO(Community Support)Community Support
14 Sept 2021

Hi @Sc927_JN

It doesn't change anything really, based on what you've said. It'll be a good idea to be aware of the Forex realisation events though in case they apply later.

The DTA between Australia and Singapore doesn't mention Forex trading or this type of investment income specifically, but take a look through to see which category would apply to you. You'll still need to find out from our Singapore counterpart if you have any lodgement obligations with them.

Loading
Do I need to pay tax for a overseas copy-trading account | ATO Community