Cryptocurrency taxes can be less of a headache.
Independent Reserve can now provide real time tax estimations for all cryptocurrencies exchanged there, including BTC, BCH, ETH, LTC and XRP.
The new functionality – the Crypto Tax Estimator – is an API that comes courtesy of a KPMG hackathon.
"The roll out of the Crypto Tax Estimator tool is a huge leap forward for guidance on tax implications within crypto trading. The Australian Tax Office (ATO) has made it clear that anyone involved in acquiring or disposing of crypto assets needs to be aware of the tax consequences, this tool provides our customers for the first time with a simple way to view this information," explains Independent Reserve CEO Adrian Przelozny.
A tricky space
Cryptocurrency tax law is still a tricky area. The rule of thumb is that it's a speculative asset subject to capital gains tax, but in certain circumstances it might also be subject to income tax or GST, and when trading crypto to crypto, spending your crypto or cashing out, CGT tax events can become a very confusing web.
"It is estimated that hundreds of thousands of Australian companies and individuals are trading crypto assets. But in this complex and fast-emerging area, there are few sources of guidance that can help people easily understand the potential tax implications of trading, such as capital gains tax. The possibility of being non-compliant is a major source of legal risk, and we want to provide an easy-to-use tool that may assist participants in the newly emerging token-based economy to understand their tax obligations," says Laszlo Peter, KPMG Australia's head of blockchain services.
"Cryptocurrency markets are growing at a rapid rate across the world, and it is important both for the crypto traders and governments that taxation rules and tools evolve to keep up with this fast-emerging area. We are excited to be helping IR launch this new tool here in Australia. This is another example of how KPMG is continuing to expand our portfolio of cryptoasset services globally."
This isn't the first ever crypto tax tool, Przelozny explains, but it is "the first bespoke API to plug directly into a crypto exchange that is backed by a global professional services firm."
"As the first exchange to be regulated by the Australian Transaction Reports and Analysis Centre (AUSTRAC), we are firmly committed to making the crypto market more attractive for local retail and institutional investors. This tax tool is a piece of critical infrastructure that will help our users understand and help manage their risk."
It might not get much easier than real time tax estimates while trading.