The post Australia To Impose Capitals Gain Tax On Wrapped Crypto Tokens appeared on BitcoinEthereumNews.com.

Table of Contents The Australian Taxation Office (ATO) has clarified that its capital gains tax on crypto products will also extend to wrapped tokens or token interactions with decentralized lending protocols.  The clarification highlights the intention of the Australian Taxation Office to continue taxing Australian crypto investors on capital gains when wrapping and unwrapping tokens.  Major Setback To Australian Crypto Holders  The clarification about the capital gains tax on wrapped crypto assets comes as a major setback to crypto holders in Australia. In May 2022, the Australian Taxation Office outlined crypto capital gains as one of four key focus areas. At the time, the ATO had also mentioned that nonfungible tokens (NFTs) were classified as an asset class that would be scrutinized for correct tax reporting.  Building on this very initiative, the ATO issued a clarification on a raft of taxable actions within its jurisdiction. Accordingly, the transfer of crypto assets to an address not owned by the sender or one that already holds a balance will be regarded as a taxable CGT event, according to the ATO’s statement.  “The capital proceeds for the CGT event are equal to the market value of the property you receive in return for transferring the crypto asset.” However, the CGT event will be triggered depending on whether the individual recorded a capital gain or loss. Tax officials have considered adopting a similar approach to tax liquidity pool users, providers, and DeFi interest and rewards.  Wrapping And Unwrapping Tokens Subject To Capital Gains Tax Additionally, wrapping and unwrapping tokens will also be subject to triggering a CGT event, according to the ATO statement.  “When you wrap or unwrap a crypto asset, you exchange one crypto asset for another, and a CGT event happens. The capital proceeds for the CGT event equal the market value of…

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Filed under: News - @ November 15, 2023 12:14 pm