Ausfinex Tax Guide

What is Ausfinex

Ausfinex is a robust, user-friendly cryptocurrency exchange in Australia designed to support a wide range of cryptos. Its intuitive interface and high-grade security measures foster a safe and effortless trading environment.

• Favourable liquidity: Ausfinex ensures ample market liquidity, allowing investors to buy or sell their cryptos easily and quickly.
• Varied cryptocurrency options: It offers an extensive choice of cryptocurrencies, enabling investors to diversify their portfolio.
• High-grade security: With advanced security measures, Ausfinex intends to protect the investor's assets from potential cyber threats effectively.

Do you have to pay tax on crypto?

The first crypto tax guidelines from the ATO in 2014 clarified that crypto transactions are taxable.

In Australia, you're legally required to declare all your income, including what you earn or lose from crypto on Ausfinex.

ATO tax treatment of crypto

There are two types of assessable income that your Ausfinex investments are taxed on in Australia:

Capital Gains Tax (CGT): You’ll end up with capital gains whenever you buy a crypto asset, and later sell it for a higher price. Capital gains and losses can result from trades, payments, disposals and many other types of transactions.

Example: You buy Ripple on Ausfinex and later sell it, resulting in a Capital Gain that you must declare CGT on.

Ordinary Income: You can easily end up earning income from a number of sources such as airdrops, rewards, earn programs and many more. These sources of income also need to be declared on your income tax return.

Example: You get a distribution on Ausfinex, resulting in Ordinary Income which must be declared.

Crypto tax is complicated, and it’s important you understand what records you need to keep and how to calculate your tax outcomes. That way you won’t make mistakes that could trigger an ATO audit.

Penalties for not declaring tax

The ATO has an annual operating budget of over $3.6 billion to administer Australia's tax system. The ATO takes tax avoidance very seriously and has a specialised Black Economy Taskforce to ensure all Australians pay their fair share. Failure to declare taxes in Australia carries serious consequences including penalties, interest charges, fines and criminal prosecution for tax evasion.

Investors who use Ausfinex and avoid their tax by not declaring their gains are putting themselves at huge risk. Fortunately, Australia has one of the highest rates of tax compliance with over 93.7% of individual taxpayers fully complying with their tax obligations, so only a very small minority are trying to actively rort the system.

Even being late to lodge your tax can be risky, putting you into bad standing with the ATO and the Australian Government, and increasing the likelihood of a review or audit. You’ll also find it much harder to get a loan or borrow for a home mortgage.

Does Ausfinex report transactions to the ATO?

Ausfinex is an Australian registered entity, Ausfinex Crypto Exchange Pty Ltd (ABN 79 623 416 679). As an Australian digital currency exchange, it's a legal requirement for Ausfinex to register with AUSTRAC, perform KYC and know the identity of their customers. This is important for preventing scammers and criminal activity.

Since 2019 the ATO has been operating a data sharing program with Australian Digital Currency Exchanges. Under the data sharing program, Ausfinex must provide transaction data of their users to the ATO.

In short, the ATO knows about your transaction history on Ausfinex.

You’ll know the ATO has your crypto transaction data, as it will show in the prefill report on your tax return. That means it's important that you do calculate and declare your crypto gains, otherwise it’s only a matter of time before you end up under audit by the ATO.

ATO record keeping requirements

To complete your crypto taxes each year, there’s some important records that you need to keep. Having these records will help you to calculate and declare your crypto tax, and are also your evidence if you need to prove how your crypto tax was calculated.

The ATO record keeping requirements for crypto require you to keep the following:

• receipts when you buy, transfer or dispose of crypto assets
• a record of the date of each transaction
• a record of what the transaction is for and who the other party is (this can just be their crypto asset address)
• exchange records
• a record of the value of the crypto asset in Australian dollars at the time of each transaction
• records of agent, accountant and legal costs
• digital wallet records and keys
• a record of software costs that relate to managing your tax affairs

The ATO has also advised that records should be kept for at least 5 years.

Ausfinex Account Statements

All reputable digital currency exchanges have account statements available to download, as they are required to ensure you can meet your record keeping requirements in Australia.

You can find your Ausfinex account statements by logging in to your account and searching for them.

You'll want to export a complete record of your:

• withdrawals,
• trades,
• deposits,
• and any other transactions.

If you're having trouble finding your account statements then reach out to Ausfinex support for assistance.

Having your records is just step one, because now you’ll need to calculate the tax outcomes for each and every transaction. You’ll need to make sure you do it accurately, or you’ll be at increased risk from the ATO.

How is crypto taxed on Ausfinex?

We all know that crypto is taxed, but the exact tax treatment can vary. Understanding exactly how your different crypto transactions are taxed can not only help you meet your tax obligations, but it can actually help you to make smarter investment decisions.

Important: In the following sections we are considering the tax treatment of an individual investor. If you’re a trader or a different entity such as a Company, Trust or SMSF, your tax treatment may vary.

When you buy crypto on Ausfinex, it is a purchase of a CGT asset for tax purposes. Whenever you purchase a CGT asset you must record and track the cost base.

When you later sell crypto, you’ll need to record the proceeds from the sale. By subtracting the original cost base from the proceeds, you'll be able to calculate and declare the resulting capital gain or loss.

The basic idea works like this:

• If your crypto went up: declare the increase in value as a capital gain.
• If your crypto went down: report the decrease in value as a capital loss.
• If you held crypto over 12 months: it’s eligible for the 50% CGT discount.

The calculations for CGT can get very complicated, which is why our tax team wrote an in-depth guide on how to calculate CGT on crypto.

How to do your Ausfinex taxes

By now, you've likely realised there can be a lot to crypto tax, and getting it done correctly can be tricky. Let’s find out how you can actually get your Ausfinex tax sorted.

ATO tax lodgement deadline

Our Australian financial year starts on the 1 July and ends on the 30 June each year, and you can prepare and lodge your tax return anytime after the 30 June up to 31 October.

The tax deadline for individual taxpayers is 31 October. Once you go past that date, your tax return is overdue, and your risk of penalties is increasing.

There is one way that you can easily extend your lodgement deadline though. You can receive an extended lodgement deadline till 15 May when lodging through a registered tax agent.

Some taxpayers find themselves with years of overdue tax returns. Unfortunately, the problem won’t just go away by ignoring it, and it’s only getting bigger in the meantime. With the ATO no doubt using the data collected from Ausfinex more effectively each year, it’s only a matter of time before they catch up with you.

If you do have overdue tax returns, then it’s always worth working with a good tax accountant. They’ll be able to help you get your tax affairs back up to date. In many cases, investors can even end up receiving tax refunds from years of unlodged tax returns.

Self-lodge vs using an Accountant

When lodging your tax return, there’s two ways to go about it. Self-lodge yourself through myTax (myGov), or by lodging through a tax agent.

Self-lodging your tax return is definitely more affordable, as it means you don’t have to pay for an accountant. However, you’ll need to be much more careful about how you calculate and declare your tax outcomes. Follow our comprehensive guide to self-lodging your crypto tax.

Using an Accountant does cost more, but it will save you a lot of headache, and you won’t have to worry whether your tax return was done correctly. You’ll also have someone you can ask questions and get tax advice from. If your crypto activity is particularly complex, then it might be worth looking at a crypto tax specialist to help you.

Regardless of which approach you take, you’ll need some type of tax software for recording your crypto transactions and calculating the tax outcomes.

If you’re an Australian taxpayer, then it’s advisable to use tax software built specifically for Australia, otherwise the tax calculations may not be done correctly, putting you at risk with the ATO

How to select crypto tax software

When it comes to managing crypto taxes in Australia, choosing the right software is crucial for compliance and ease of use.

Tax regulations and compliance requirements vary significantly across jurisdictions, and what works in one country may not be suitable in another. Australian crypto investors need tax software that is specifically tailored to the unique aspects of Australian tax law. It's essential that the software not only calculates these taxes accurately but also updates its tax logic as tax laws evolve.

Ensure the crypto tax software is built specifically for Australia. Otherwise you may declare your tax incorrectly or overpay more tax than required.

You should also check for the software’s ability to integrate with popular Australian and international crypto exchanges. Having good support for Ausfinex is a must, but you should also consider any other platforms you trade on.

Quality integrations are vital for maintaining accurate and complete records of all your crypto activities.

Crypto tax is complex, so having software that is user-friendly and intuitive will be a big help. Look for software that generates detailed, ATO-compliant reports which can be directly used for tax filings or shared with your accountant. You should also consider the level of customer support offered, and whether it's actually coming from an Australian support team.

If you don't have tax software for your crypto yet, then sign up for an account with Syla. It's the only tax software built exclusively for Australian crypto investors, and it has an assisted file import process for Ausfinex.

Using crypto tax software

Crypto tax software is designed to make doing your crypto taxes much simpler. The software will calculate all the tax outcomes for you, so you only need to import your transactions, make any edits as required, and download your final crypto tax report. All the complicated tax calculations are automatically done for you.

It’s really easy using Syla to do your crypto tax:

1. Get started with a free account.
2. Add Ausfinex as a data source and import your transactions.
3. Add any other platforms and wallets.
4. Review your transactions.
5. Download your Crypto Tax Report.

Syla does all the heavy lifting for you. Your transactions will be imported and the tax calculations will be done for you. When using LTFO tax optimisation you can even achieve lower tax outcomes than you normally would.

Once you've downloaded your crypto tax report from Syla, you can either give it to your tax agent, or you can use it to self-lodge your own tax return.

Importing transactions from Ausfinex

The first step to getting your crypto tax sorted is to import your transactions from Ausfinex.

Syla supports an assisted file import process for Ausfinex.

File Import

Using a File Import is an effective way to import all your transactions on Ausfinex as it’s safe and easy to do.

If you get stuck, we also have an Assisted File Import process.

Download your crypto tax report

Once you have all your transactions imported into Syla, you can view them, make edits if needed and import any other Data Sources that you have.

After you’re happy with everything, you can download your Crypto Tax Report.

Tax software for Ausfinex

It's very difficult to correctly calculate all the tax outcomes of your crypto by hand unless you're a tax accountant.

If you are using a tax accountant, then you probably don’t want them doing it by hand either, as it's going to take a long time and cost a lot.

That’s where using crypto tax software can save you a lot of time and money, that you'd rather spend doing something else. 😊

Syla is the only crypto tax software designed specifically and only for Australia. Syla not only calculates all your tax outcomes to ensure you are ATO compliant, but it also optimises your tax to ensure you pay the lowest crypto tax legally possible, saving you both time and money.

• Best value - $59 AUD for 10,000 transactions.
• Absolute certainty - purpose-built for Australian tax law.
• Maximise your tax savings - using Syla's proprietary LTFO method.

👉 Get started for free.