Review of the Tax Treatment of Digital Assets and Transactions in Australia

On 21 March 2022, the former Government released the Terms of Reference for a review to be undertaken by the Board of Taxation (the Board) into the appropriate policy framework for the taxation of digital assets and transactions (i.e. crypto assets) in Australia.

The reference is in line with the Government’s commitment to improve transparency in our taxation system and ensures the global system is more robust.

Background to the Review

On 8 December 2021, the former Treasurer announced as part of a broader response to a review on Australia’s payments system and the regulation of digital assets, that the Government would task the Board with undertaking a review into the appropriate policy framework for the taxation of digital transactions and assets in Australia.

Terms of Reference

With reference to Australia’s strong competitive position as an early adopter of digital innovations relative to other jurisdictions, the scope of digital transactions and assets, and without increasing the overall tax burden, the Board is asked to:

  • Consider the current Australian taxation treatment of digital assets and transactions and emerging tax policy issues;
  • Consider the awareness of the taxation treatment by both retail and wholesale investors and those transacting in digital assets as part of their business;
  • Consider the characteristics and features of digital assets and transactions in the market, including the rapid evolution of technology supporting the broader digital asset ecosystem;
  • Analyse the taxation of digital assets and transactions in comparative jurisdictions and consider how international experience may inform the taxation of digital assets and transactions in Australia; and
  • Consider whether or not any changes to Australia’s taxation laws and/or their administration are warranted in the context of digital assets and transactions, both for retail and wholesale investors.

Working Group

The Board appointed Board members Mr Anthony Klein and Ms Tanya Titman to lead the review. They will be assisted by a working group comprising members of the tax profession, academia and representatives of the ATO and the Treasury. The working group will conduct targeted consultation with stakeholders in the business community, academia, and government.

Consultation

In August 2022, the Board published a Consultation Guide [PDF 555KB | DOCX 400KB] which provides an overview of crypto assets and the current taxation treatment within Australia. The guide outlines recent relevant government reports and announcements and poses a series of questions for interested parties to consider when formulating input to the review.

The Board also proposes to hold the following series of consultations on the following dates (all times are Australian Eastern Standard Time):

  • 5 September 2022 at 9:30 am
  • 8 September 2022 at 10:00 am (in person in Sydney and virtual)
  • 14 September 2022 at 9:30 am
  • 15 September 2022 at 2:00 pm
  • 19 September 2022 at 9:30 am
  • 21 September 2022 at 9:30 am
  • 23 September 2022 at 9:30 am

All consultation sessions will be conducted virtually (except for 8 September 2022 which will be both virtual and in person in Sydney). However, we may conduct additional consultation sessions in person depending on the level of interest per session and the location of the participants.

If you would like to participate in discussions, please express your interest at TaxDigitalAssets@taxboard.gov.au, and let us know where you are located and your industry. Private discussions with Board members leading the review, treated in strictest confidence, may also be arranged in certain circumstances upon request.

Submissions

In addition to participating in consultations, the Board welcomes any written submissions to this review. Submissions can be made to TaxDigitalAssets@taxboard.gov.au.

Written submission responses to this Consultation Guide are due by 30 September 2022.

Timing

The Board is asked to report back to the Government by the end of 2022.

Further Information

If you would like further information, please contact the Board of Taxation Secretariat at TaxDigitalAssets@taxboard.gov.au or +61 2 6263 4366.