Announcements
On 7 August 2020 the government proposed further changes to the JobKeeper extension. For more information, visit the Treasury website.

ATO Community

Can the ATO please answer some questions? Where are you?

This post is archived and may not be up-to-date.

Highlighted

Megastar

Views 2952

Replies 10

There's now less than 3 months before the end of financial year and the ATO seems to have been conspicuously absent from this forum, with barely any questions being responded to since last year.

 

What happened? We need answers.

 

So, for the umpteenth time can you PLEASE clarify:

1) What actually qualifies as a personal use asset? We don't need to know what it isn't, or what MAY be one. What SPECIFICALLY qualifies?

2) How SPECIFICALLY does one distinguish between crypto mining as a hobby vs a business?

3) Is small scale crypto mining actually mining? Because most "miners" are, in actuality, selling hash power to a mining pool which is doing the actual mining. So is this a sale of services (in which case the crypto would be "income" and not "trading stock")?

4) If one is in the business of crypto mining how does one value trading stock? Is it valid to use the cost price method of valuation in which case (if all mined crypto is held) the cost is the same as expenses (electricity, equipment depreciation) which would give a neutral position with no additional tax liability until the crypto was sold?

5) Is a crypto-to-crypto trade a CGT event, and if it is...WHY? Crypto can be traded with no reference to fiat. This can be done without even having an account on an exchange (e.g. Shapeshift), and there may not even be a record of the trade kept by the service. So, how is an AUD value determined and how is this supposed to be recorded?

 

1 ACCEPTED SOLUTION

Accepted Solutions
Highlighted

Best answer

ATO Certified

Devotee

Replies 3

Hi @cryptomess,

 

It’s great to see such robust discussion about cryptocurrency! We learn a lot about community needs and expectations from your posts, and we value your feedback to help us improve our services moving forward.

 

We know that it’s taking longer than the community would like to answer questions, and that you’re looking for certainty to help you prepare for tax time 2018. However, as the managers and moderators of ATO Community, we strongly feel that it’s better to give you the right information - instead of information right now.

 

We’re working with legal networks in the organisation to fact check and confirm answers, and we’re trying to develop some frequently asked questions guides and examples to make it easier for you to find what you’re looking for online.

 

We’ve just ended consultation over on Let’s Talk, and we’ve received overwhelming feedback to help us understand the taxpayer experience with substantiating cryptocurrency taxation events. You can also find our most up-to-date information about cryptocurrency over on ato.gov.au, and in a series of Tax Determinations we released in 2014.

 

We recognise that ATO Community might not be the right service for everyone, and you may prefer to find information from other sources or forums. It's important to note, though, that the information and resources we post here have been verified by ATO experts.

 

If you need information that applies to your specific situation, you can request an early engagement discussion or apply for a private ruling. Private rulings are written advice, binding on our behalf, on how the tax law applies to your circumstances. Rulings are a free service, and we try to respond within 28 days.

 

We’ve passed on your feedback about these delays to other areas in the ATO. In the meantime, you can subscribe to specific boards or threads to get RSS notifications as we update our content.

 

Thanks, AmandaE

10 REPLIES 10
Highlighted

Anonymous

Replies 9

This forum is just for general information and the ATO seem a bit overwhelmed by questions atm.

 

May I suggest that you apply for an ATO Private Ruling and in your application you request that the ATO advising officer (that is going to review your request) give you a phone call so you get the opportunity to discuss with them before they start so there is no confusion.  They have a 28 day turn around standard for these.

 

I can give you a link for basic business v hobby,  Before-you-get-started  , but as you are dealing in a specialist issue it may not answer your questions.

 

Apply for a ATO ruling - - Applying-for-a-private-ruling

 

Or you can contact the ATO -  13 28 66 – between 8.00am and 6.00pm, Monday to Friday

 

 

 

 

Highlighted

Megastar

Replies 8


@Anonymouswrote:

This forum is just for general information and the ATO seem a bit overwhelmed by questions atm.

I appreciate that the forum is for general information, but the questions I'm asking ARE general questions about crypto, which have come up time and time again, and there still hasn't been any definite answers from the ATO for them. At least answers that aren't full of weasel words.

 

And if the the ATO are overwhelmed by questions now, how do you think they are going to be come tax time with the flood of new crypto users/investors in the last year that are trying to prepare their tax returns with all the conflicting and ambiguous information that is out there on the tax implications of crypto?

 


May I suggest that you apply for an ATO Private Ruling and in your application you request that the ATO advising officer (that is going to review your request) give you a phone call so you get the opportunity to discuss with them before they start so there is no confusion.  They have a 28 day turn around standard for these.


You can suggest that, but unless you can offer a way to seek a ruling anonymously I won't be doing it. There is no way I am going to identify myself to the ATO and risk having a giant target put on my back. I'm just someone who wants to know what I need to do to pay my fair share of tax. That information should be PUBLIC!

 

Does the ATO want us to pay our taxes or not? If so, please get your act together. Make it fair. Make it simple. Make it understandable, and make it PUBLIC! Please, and soon!

Highlighted

Anonymous

Replies 1

I hear the frustration and can understand where you are coming from, but Im not an ATO employee I only provide my input from the extensive experience I have in taxation, but unfortunately I do not know anything about crypto otherwise I would give you an answer.

 

I have no idea why the ATO would set up a forum and then apparently not respond to questions, that is a question for them.

  

A lot of people are apprehensive about applying for a ruling because they have the same line of thought that you do, but from my experience I have never had a problem along the lines of been targeted for an audit, and I have applied for a lot of rulings on varing issues.

 

I know the SMSF area now have an email address that you can send super requests to, and I would like to think that the ATO have put in place something similar for individuals and business.

 

Maybe you can try the general contact number I previously provided to see if they do have an email address.

 

These are only my suggestions for what they are worth ..

Highlighted

Enthusiast

Replies 0

"but unfortunately I do not know anything about crypto otherwise I would give you an answer."

This is one of the big problems. There's this vague pattern of advice based on a lack of knowledge as to how crypto works. How is the average person meant to work out their taxes on crypto when the average accountant can't?
Highlighted

Anonymous

Replies 0

Hi @SetiMaster

 

you may wish to try the ATO's early engagement team....   you can submitt a request for information two different ways .. and it seems as though you can provide as little detail about yourself as you want ..

 

have a look at this - Early-engagement

 

 

 

Highlighted

Enthusiast

Replies 4

Seti. I think we need to set up a group/forum separate from this site so we can get properly organised. This forum is hopeless, they're not really answering and if some random accountant does, it's usually a harsh response coupled with a complete lack of understanding as to the realities of crypto.
This is a mess.. any suggestions on setting up such a group? There are obviously a large amount of people on here that have similar questions/frustrations, most of which are well articulated. If we got together, and used a better set up forum or messaging service, we will be able to pool answers/ideas more effectively.

The worst thing about this site is that we are the few that want to do the right thing, and all we get is for the most part condescending answers.
Highlighted

Best answer

ATO Certified

Devotee

Replies 3

Hi @cryptomess,

 

It’s great to see such robust discussion about cryptocurrency! We learn a lot about community needs and expectations from your posts, and we value your feedback to help us improve our services moving forward.

 

We know that it’s taking longer than the community would like to answer questions, and that you’re looking for certainty to help you prepare for tax time 2018. However, as the managers and moderators of ATO Community, we strongly feel that it’s better to give you the right information - instead of information right now.

 

We’re working with legal networks in the organisation to fact check and confirm answers, and we’re trying to develop some frequently asked questions guides and examples to make it easier for you to find what you’re looking for online.

 

We’ve just ended consultation over on Let’s Talk, and we’ve received overwhelming feedback to help us understand the taxpayer experience with substantiating cryptocurrency taxation events. You can also find our most up-to-date information about cryptocurrency over on ato.gov.au, and in a series of Tax Determinations we released in 2014.

 

We recognise that ATO Community might not be the right service for everyone, and you may prefer to find information from other sources or forums. It's important to note, though, that the information and resources we post here have been verified by ATO experts.

 

If you need information that applies to your specific situation, you can request an early engagement discussion or apply for a private ruling. Private rulings are written advice, binding on our behalf, on how the tax law applies to your circumstances. Rulings are a free service, and we try to respond within 28 days.

 

We’ve passed on your feedback about these delays to other areas in the ATO. In the meantime, you can subscribe to specific boards or threads to get RSS notifications as we update our content.

 

Thanks, AmandaE

Highlighted

Enthusiast

Replies 2

@AmandaE

Thanks for your response. When the ATO consults experts, who might they consult? It's such a new field. Do crypto experts even exist outside of the developers?

The overwhelming community response from what I've read on here goes along the lines of "taxing crypto-to-crypto???????", followed by some tax experts that are admittedly not all that familiar with crypto saying "it's no different to shares". *BANGS HEAD AGAINST WALL*. The headaches and ultimate non-compliance will be caused by this rule.. which is illogical if you have been deeply involved in crypto for any period of time. Most people I've talked to think I'm wrong when I tell them this rule. They can't believe it!

In taxing crypto-to-crypto, you're asking the average Joe to be able to work out something far more complicated than the simple trading of shares. It's utterly illogical and to the detriment of both the taxpayer and the auditors.
I'm going to try my best to work it out, but it's going to be a very rough figure (and I'll be paying tax on what is realistically unrealised gains/and losses). This isn't because I'm silly, but because you're asking us to determine the value of swapping X for Z so you can get Y on foreign exchanges not linked to fiat (AUD), far away from the entry points on AUS exchanges. Ontop of that, the market is essentially psychotically volatile. You're assuming there's some kind of "gain", when until you've cashed out into fiat it's really like working out whether the cat is alive or dead in Shrodingers box. If one were to keep all their Ether on BTCMarkets and only trade on there, it would be okay (and I think the ATO believes this is what is happening for the most part). But we're using at minimum 5 foreign exchanges, all with different ways of recording data, plus shapeshift etc.

Our frustration is in rules that make noncompliance inevitable for a majority (look at US stats on such - under .5% report), and the likelyhood of a loss due to taxes rather high. A lot of people will have lost out, but still find themselves having to pay taxes on top of that. Now.. most tax experts will say "too bad so sad".

Considering the ATO is still trying to work all this out, how is it fair to at the last minute lump people with an accounting nightmare that will likely leave them utterly broke. How is it fair to expect the average person to work out their tax obligations on something the average accountant and the ATO is still unsure about. Are those involved in crypto going to be hit with all the fines associated with noncompliance even if they've tried to work out answers (only to be left with more questions) from official forums like this?

Highlighted

Enthusiast

Replies 1

Despite what some people say on here, there is no tool that can work this out adequately for you. It might within a limited range of exchanges.. but that's it. I