Merchant cryptocurrency taxes made easy
The same swap and countertrade transactions tax ruling process apply to using Bitcoin and other Cryptocurrency Business Operators transactions to obtain non-cash assets. This means that if you take cryptocurrencies as payment at your business, you’ll almost certainly be charged GST on any cryptocurrency you receive. For example, the value in Australian dollars will be the fair market value determined at the time of purchase via a reputable bitcoin exchange.
You are entitled to a deduction based on the fair market value of the item obtained if you are carrying on a business and purchasing business products with bitcoin (including selling stock with bitcoin). Please speak to our Cryptocurrency Business Operators accounting team.
Paying of salary or wages in cryptocurrency
The payment of the cryptocurrency is considered a fringe benefit, and the employer is subject to the provisions of the Fringe Benefits Tax Assessment Act if an employee has a valid salary sacrifice arrangement with their employer to receive their salary in Bitcoin or another cryptocurrency instead of AUD.
The payment is treated as a standard salary or wages without a legitimate salary sacrifice agreement. The employer must satisfy their pay-as-you-go requirements as usual. Please speak to our Cryptocurrency Business Operators accounting team.
Convert crypto payments to AUD or hold
You may have opted to allow clients to pay your bills in cryptocurrency but have AUD put into your bank account if you’re a business that has collaborated with a cryptocurrency payment processor. The payment processor is converting the bitcoin to Australian dollars for you. This is a simpler method for ATO tax purposes because it essentially means business as usual – book the AUD bank deposit as income and pay your business income tax and GST, if applicable.
Some businesses choose to keep the bitcoin or other crypto rather than convert it to AUD right away. As a result, the cryptocurrency held by the company is often treated as trading stock, with tax implications emerging from later sales based on realized gains or losses. As a result, the issue becomes a little more complicated, and it’s critical to keep meticulous records. Please speak to our Cryptocurrency Business Operators accounting team.
An accountant will help optimise your taxation outcomes. They will make sure you meet your tax obligations, help you identify savings and highlight opportunities to enhance your business. Rather than asking why do I need to use an accountant, the question you should ask yourself:
+ Do I enjoy doing the bookkeeping and accounting?
+ Is doing my own accounting a good use of my time?
+ Do I have the time to stay up-to-date with ATO compliance?
+ Is it risky to my business to try to go alone with my tax?
If the answer is yes, contact us to find out how we can help take away all your bookkeeping and accounting worries.
Bitcoin is a new and emerging digital currency that’s changing how we do business. If you received or used Bitcoin for goods/services provided as part of your business, then it will need to be declared in Australian dollars on your taxes this year!
When you receive or pay for goods and services in bitcoin, it’s important to consider the GST that come with it. If your business is registered for GST, then you will need to account for the GST portion of your Bitcoin or other Cryptocurrency when it comes time that you’re required by law.
The Ingrams Accounting process
Get in touch if you’re ready to have a better relationship with your business’s numbers. It doesn’t matter if you are small, medium-sized, a large enterprise, or in between. We can help you no matter how easy or complex your business is. Please speak to our Cryptocurrency Business Operators accounting team.
15 Minute Consultation
We want to know a bit about where your numbers are, but more than that, we want to ask questions about what makes your business tick and what we can do to make it even greater. Please speak to our Cryptocurrency Business Operators accounting team.
Number Crunching & Reporting
Sure we’ll prepare your tax return and lodge it on your behalf, but more than that, we’ll prepare the reports that will inform strategic decisions and get you on track with good number management. Please speak to our Cryptocurrency Business Operators accounting team.
Implementing Processes & Education
After reviewing the number data we move on the education on how to simplify good numbers towards doing great things for you and your people. Please speak to our Cryptocurrency Business Operators accounting team.