What is NiceHash
NiceHash is a globally recognised cryptocurrency platform widely used in Australia due its flexibility, reliability, and efficiency. This platform remarkably streamlines cryptocurrency mining, trading, and storing.
- User-friendly: NiceHash offers an intuitive, easy-to-navigate interface that makes it an ideal platform even for novice crypto investors.
- Multifunctionality: Beyond just a traditional cryptocurrency trading platform, NiceHash supports effective cryptocurrency mining and provides secure storage for your digital assets.
- Cost effective: With its competitive transaction fees, Australians find NiceHash a cost-efficient option for crypto dealing, potentially maximising returns on their investments.
Do you have to pay tax on cryptocurrency?
Since 2014, when the ATO first introduced guidelines on crypto taxes, it's been obvious to all that crypto must be declared in your taxes.
As an Australian taxpayer, you are legally required to report your worldwide income, including crypto earnings and losses on NiceHash.
ATO tax treatment of crypto
There are two types of assessable income that your NiceHash investments are taxed on in Australia:
Capital Gains Tax (CGT): You’ll end up with capital gains whenever you buy crypto, and later sell it for a higher price. Capital gains and losses can result from trades, gifts, swaps and many other transaction types.
Example: You buy Polkadot on NiceHash and later sell it, creating a Capital Gain that you must declare CGT on.
Ordinary Income: You can easily end up earning income from a range of sources such as referrals, airdrops, commissions and many more. These sources of income must be declared on your income tax return.
Example: You receive an airdrop on NiceHash, 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, equipped with a $3.6 billion yearly budget, is responsible for Australia's tax administration. It employs a specialised Black Economy Taskforce to crack down on the shadow economy, including undeclared crypto. Failing to declare taxes in Australia carries serious penalties, including fines, interest charges, and even criminal prosecution for tax evasion.
Investors on NiceHash who avoid declaring their profits are incurring enormous risks. In Australia, fortunately, we see one of the world's highest tax compliance rates, with more than 93.7% of people fully adhering to tax laws. Those that don't are often quickly approached up by the ATO.
Late tax filings can lead to complications, putting you in a less favorable position with the ATO and the Australian Government, and increasing the likelihood of audits or reviews. It can also make it harder to secure loans, especially home mortgages.
Does NiceHash report transactions to the ATO?
The ATO has over 100 information sharing agreements, which cover almost every country and tax jurisdiction globally, to ensure no one avoids their tax.
In short, the ATO is going to find out about your transaction history on NiceHash. Even if they don't find out about it this year, they'll find out in the very near future.
The last thing you want is the ATO coming after you for years of tax avoidance. That means it's important that you do calculate and declare your crypto gains, otherwise it’s only a matter of time before the ATO comes after you.
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.
NiceHash Account Statements
NiceHash has made a number of account statements available to ensure you can meet your record keeping requirements. You can follow the account statement export instructions from NiceHash to download a copy of the files.
You can download the following account statements from NiceHash.
Your crypto tax software may also be used to satisfy the ATO record keeping requirements. Syla has been designed to satisfy Section 121.20 and Section 121.25 of the Income Tax Assessment Act 1997, that deals with ATO record keeping requirements.
Syla is an industry-leading crypto tax software that can be used for NiceHash. Syla can be used to record your transactions by File Import. Syla keeps a record of the original source data, in the exact format it appeared on your account in NiceHash, ensuring you meet your record keeping obligations.
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 NiceHash?
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.
Buy and sell crypto
Capital Gains
When you buy crypto on NiceHash, 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.
Latest ATO advice on NiceHash
If you want to know what the ATO thinks about your investments on NiceHash, then you should read some of their latest advice. Here's some of the ATO's most recent tax guidance on NiceHash.
How to do your NiceHash 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 NiceHash 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 NiceHash 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
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.
Syla is crypto tax software that is designed exclusively for Australia and has an industry-leading tax integration for NiceHash.
It’s really easy using Syla to do your crypto tax:
- Get started with a free account.
- Add NiceHash as a data source and import your transactions.
- Add any other platforms and wallets.
- Review your transactions.
- 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 NiceHash
The first step to getting your crypto tax sorted is to import your transactions from NiceHash.
Syla has an industry-leading tax integration with NiceHash. You can use the File Import in Syla.
File Import
Using a File Import is an effective way to import all your transactions on NiceHash 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.
ATO crypto tax report
Tax software for NiceHash
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 cryptocurrency 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.
