An Australian crypto enthusiast has paid five times the value of his crypto coins in tax. Adrian Forza, the director of Crypto Tax Australia unveiled this information, noting that one of his clients paid $100,000 in tax on coins worth $20,000.
The crypto holder had to pay this bill because the Australian Taxation Office (ATO) required him to declare the tax at the value of obtaining the coins. Per Forza, his client got a crypto payment for a development job he did for a foreign firm. The client got the payment in January 2018 when the crypto market had just hit its all-time high. At that time, his coins were worth $250,000. However, the crypto market plunged soon afterward. By the time the bill rolled in, the coins were worth $20,000.
Unfair Crypto Tax Laws
Following this news, crypto experts have called for a change in Australia’s unfair bitcoin (BTC) and crypto tax laws.
In a report, Forza who has specialized in crypto tax for two years noted,
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.
ATO Claims Ethereum (ETH) Is Not Original
Forza said that the tax office had made some crypto tax private laws that many adopters are unaware of. For instance, ATO considers that ethereum classic (ETC) is the original coin that came out of ethereum’s (ETH) fork. Per the tax office, ETH is not original. Therefore, the agency considers that anyone that held ETH during the fork and sold it afterward bought it for $0.
This means that such investors would have to pay capital gains on 100 percent the amount they got after selling their ETH.
Forza further cited,
In the crypto space people think of Ethereum as the original, but the ATO has said that Eth is the one that changed and ETC kept all of its original properties,
This situation is similar for BCH and BSV holders.
Adopters Don’t Understand Crypto Taxation Laws
According to Forza, crypto enthusiasts don’t understand the taxation laws.
The demographic is 25- to 40-year-old males and a lot of them probably haven’t invested in shares or even seen an accountant before,
The founder of Australian Crypto Tax Chat, a Facebook group noted,
They don’t understand the difference between trading and investing and they don’t understand that if they haven’t pulled it out (of crypto into fiat), how there is a taxable gain – they don’t understand they’ve made a profit by trading one coin to another,
Do you think Australia’s ATO has enforced unfair crypto taxation rules? Let us know in the comments section below.