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Hi @Purplor
On the surface at least, what you describe does not include a CGT event.
You will need to do some research though, into the use of cryptocurrency to purchase products and services on the card. The accumulation of rewards on the card in the form of additional crypto assets, will definitely trigger a CGT event once those assets are sold or disposed of through transactions.
Our current position is that crypto-to-fiat debit cards are treated the same way as any other cryptocurrency transaction. At the point of sale using crypto currency, the crypto is converted into AUD, which triggers a CGT event. Transacting with cryptocurrency - https://www.ato.gov.au/general/gen/tax-treatment-of-crypto-currencies-in-australia---specifically-bitcoin/?anchor=Transactingwithcryptocurrency.
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Hi @Purplor
On the surface at least, what you describe does not include a CGT event.
You will need to do some research though, into the use of cryptocurrency to purchase products and services on the card. The accumulation of rewards on the card in the form of additional crypto assets, will definitely trigger a CGT event once those assets are sold or disposed of through transactions.
Our current position is that crypto-to-fiat debit cards are treated the same way as any other cryptocurrency transaction. At the point of sale using crypto currency, the crypto is converted into AUD, which triggers a CGT event. Transacting with cryptocurrency - https://www.ato.gov.au/general/gen/tax-treatment-of-crypto-currencies-in-australia---specifically-bitcoin/?anchor=Transactingwithcryptocurrency.
I would like to confirm whether the crypto assets earned through the Crypto com card would still be considered ordinary income or an airdrop if I sell them immediately after receiving them.
For comparison, HSBC AU's Everyday Global Card also has a cashback program, though it rewards in fiat rather than crypto. The mechanism seems similar, so I’d like to understand if the same tax treatment applies.
Looking forward to your clarification.
Thank you.
Hi @lokchew,
In some circumstances, crypto assets that are not an investment, are personal use assets. In this situation, the crypto is not subject to CGT.
An example is when crypto is acquired and used in a short period of time, to buy items for personal use and consumption.
You determine whether your crypto is an investment or for personal use at the time you dispose of it.
Here is a link to our Taxation Determination for more info on crypto and tax.
Thank you for the explanation.
I have reviewed the links provided and would like to confirm whether my understanding is correct.
In my case, I treat the crypto assets earned from my Crypto Card as instant cashback and sell them immediately, rather than holding them for short- or long-term investment. Based on this, they would be considered personal use assets.
Additionally, as per the taxation determination under subsection 118-10(3) (thanks for sharing the reference), the crypto assets I acquire and sell immediately from each transaction are valued at less than $10,000. Given this, they should not be subject to capital gains or losses.
Could you please confirm if my understanding is correct? I appreciate your assistance.
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