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Crypto currency day trading on a foreign exchange

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Newbie

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Replies 1

Hello,
I have the following scenario and I want to understand it’s tax implications to asses it’s feasibility:
The scenario:
1- transfer money from my bank account to foreign exchange ($100)
2- day trade crypto to crypto using a trading bot -software that does the trading on my behalf- for 30 days (potentially buy and sell multiple times per day and feed the profit into the next transaction)
3- take profit/loss and start over with a ($100). For the sake of simplicity let’s assume final balance after 30 days is $120. I withdraw $20 and keep the $100 to continue trading.
The questions:
1- is this taxable inside Australia even if it’s done in another country?
2- if the above question answer is yes. How about I withdraw the profit to another country and pay tax there?
3- if it’s still taxable. How can I estimate/calculate the tax? I mean I understand that I need to record each transaction and calculate my gains but still I need to clarify the following:
3.1- when the tax is due?
3.2- do I add the yearly gains to my income and calculate the tax for the overall income?

Thanks
1 ACCEPTED SOLUTION

Accepted Solutions
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Most helpful response

Taxicorn

Replies 0

(1) AS you are an Australian resident for tax purposes then all your worldwide income is declared and taxed in Australia.

 

(2) Can do it but you will still be taxed in Australia.

 

(3) Every single transaction needs to be recorded with a $Au value.

 

(3.1) Your tax obligation is when you lodge your tax return.

 

(3.2) All depends if you are considered an investor or a trader.

 

A Trader is running a business whilst an investor is not.

 

Running a business you can claim more deductions, need to have an opening and closing balance which can be at cost or market value. Purchases are deductions. There is no discount if held for longer than 12 months.

 

An investor basically would work out, for every transaction, a gain of a loss, add them all up and then add this to their taxable income. (or record a loss if there was an overall loss).

 

 

 

 

 

1 REPLY 1
Highlighted

Most helpful response

Taxicorn

Replies 0

(1) AS you are an Australian resident for tax purposes then all your worldwide income is declared and taxed in Australia.

 

(2) Can do it but you will still be taxed in Australia.

 

(3) Every single transaction needs to be recorded with a $Au value.

 

(3.1) Your tax obligation is when you lodge your tax return.

 

(3.2) All depends if you are considered an investor or a trader.

 

A Trader is running a business whilst an investor is not.

 

Running a business you can claim more deductions, need to have an opening and closing balance which can be at cost or market value. Purchases are deductions. There is no discount if held for longer than 12 months.

 

An investor basically would work out, for every transaction, a gain of a loss, add them all up and then add this to their taxable income. (or record a loss if there was an overall loss).