Crazy crypto tax law in Australia contains some very harsh provisions that would put the crypto owners in a huge tax burden. These unfair tax laws also apply to tokens which were obtained via hard forks and why is this the case, we read more in the latest cryptocurrency news below.
Companies that also pay their employees in cryptocurrency will have major inconvenience with the taxes which are likely to incur at the end of this year. According to the Australian news outlet platform Micky, one crypto holder had to pay up to 500% tax on his digital assets. Crypto Tax Australia’s Adrian Forza stated that the country’s crazy crypto tax law stipulates the value of cryptocurrency used for tax purposes comes from the price which was set for the purchase.
If one investor buys a token X at $100 and then the price drops to $10, the tax for the token will be based on the $100 purchase price. The crypto tax in Australia is about 40% so that means you would have to pay a $40 tax on $10 worth of virtual currency. Forza declared:
‘’That’s a really unfair outcome because he’s basically received cryptocurrency and the value has dropped significantly and now, he has to pay tax on money he doesn’t have. This is something they will have to change as it is unfair.’’
During the 2018 bear market, the prices plummeted by more than 80 percent across the board so the virtual currency holders in Australia needed to pay unfair taxes. Around the world, the crypto taxes make it possible for users to hold crypto for a longer period of time not to lose their assets on paying the taxes.
Forza also noted that there were some other crazy provisions in Australia’s tax system. For example, the Australia Taxation Office considers Ethereum Classic as the original Ethereum even though nobody else thinks this is the case. Ethereum Classic came after an Ethereum hard fork. The implication of this tax law is that the Ethereum users have to pay capital gains on 100% on their ethereum holdings only because the tax agency considers the purchase price to be zero.
As it was reported in the coming altcoin news, there is another crazy tax law regarding the companies which want to pay their employees in crypto. Now, they have to pay up to 47% on every dollar paid. This extra cost makes it very hard for companies to pay their stuff in Bitcoin which could really dampen the bitcoin or crypto adoption.
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