Australian cryptocurrency owners need to stay aware of their profits and understand if they incur tax obligations, experts warn.
A recent University of Queensland study revealed that 1.5 million Australian cryptocurrency owners remain uncertain about the tax status of their digital assets.
According to the study, the Tax Office plans to pursue cryptocurrency owners who fail to meet their tax responsibilities.
As the October 31 deadline approaches, many crypto owners may soon realize “the hard way” that their assets are not tax-free.
The study, which surveyed 745 coin holders, found that 66 percent were aware they would owe tax on cryptocurrency profits. Meanwhile, 8 percent were unaware of this obligation, and another 25 percent were unsure.
Interestingly, 64.5 percent of those in the ‘unsure’ group were women.
The study estimated that with 4.5 million cryptocurrency owners across Australia, 33 percent are unclear on tax obligations—equivalent to 1.5 million people who may not have set aside funds for tax payments.
“Australians may be unaware of the tax implications, leaving them financially vulnerable if they encounter unexpected tax liabilities,” the study stated.
“If investors don’t report this income, they may face future follow-up from the Australian Taxation Office.”
The results also showed that 49 percent of the ‘unaware’ group had tertiary education, which experts found “surprising.”
Following the study, experts urged cryptocurrency owners to do thorough research before investing and to educate themselves on potential risks and tax obligations.
Leading crypto analyst Sydel Sierra emphasized the importance of understanding cryptocurrency rules, noting that ignorance won’t excuse non-compliance.
“In Australia, cryptocurrencies are treated as personal income rather than currency, so if you sell at a profit, it’s subject to tax,” Sierra explained.
“It can be surprising if you didn’t know the ATO would enforce this, but at least only a portion of the profit is taxed, not the entire amount.”
According to Sierra, taxable crypto amounts depend on personal income and are taxed accordingly.
“For high-income earners in the top tax bracket, they’ll pay 45 cents per dollar on gains—a result of their higher earnings.”
“If you hold your crypto for over a year before selling, you’ll receive a 50 percent discount, meaning only half of the profit will be taxable.”
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