Taxing cryptocurrencies remains a complex and often controversial topic. Recently, Australia launched new cryptocurrency tax guidelines. Not surprisingly, they have sparked heated debate among experts and stakeholders in the field.​

Australian Taxation Office’s stance on cryptocurrency taxation

On November 9, the Australian Taxation Office (ATO) released guidance that could have a significant impact on how investors and traders involved in decentralized finance report their taxes. The ATO’s move marks a key step in addressing the tax implications of rapidly growing DeFi activities. However, the clarity and applicability of these guidelines have been controversial.

Australian law firm Cadena Legal has been outspoken about the vagueness of these guidelines. In a blog post on November 27, the firm criticized the ATO's guidance as "non-binding" rather than a clear public ruling. Cadena Legal said that due to the lack of binding force, the guidance is invalid. In addition, the firm stressed that under the current guidelines, there is confusion in the application of capital gains tax (CGT) in DeFi transactions.

The lack of a public ruling on the matter leaves a grey area for those engaging in DeFi activities. A public ruling would provide taxpayers with a clear, legally binding framework and reduce the prevailing confusion. Without such a ruling, current guidelines increase uncertainty and could impact tax compliance for the Australian cryptocurrency community.

Experts have mixed reactions

Dell, who previously worked as an ATO auditor, advises clients to ignore the ATO's guidelines for now. This position stems from the belief that the current guidance is panic-inducing and lacks clarity. Conversely, some cryptocurrency tax experts warn against ignoring the ATO's guidelines. While not legally binding, these guidelines may still affect legal proceedings. As a result, they may require investors to seek legal assistance to challenge the ATO's decision.

Clarity on cryptocurrency taxation in Australia remains unresolved. Experts such as Dell say solutions may only come through strategic litigation or new legislation to address the gaps left by the Australian Taxation Office’s current guidelines. Unfortunately, such developments may take time, leaving stakeholders in a state of uncertainty. #澳大利亚  #加密税收