Taxing of Cryptocurrency Doc

Added on - 04 Oct 2020

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Taxing of Cryptocurrency
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Part One...........................................................................................................................................1Part Two..........................................................................................................................................1A) Meaning of cryptocurrency...............................................................................................1B) Cryptocurrency taxed in Australia.....................................................................................2C) Role of revenue authorities for correct taxation................................................................3D) Measures being taken by tax authorities for ensuring taxpayers fulfil their liabilities.....3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................4
INTRODUCTIONCryptocurrencies are usually in the form of online currencies which are used by investorsto earn capital gains. Present report deals with working of cryptocurrency in Australia. Inaddressing this, Bitcoin which is a type of cryptocurrency is mostly used currency belonging tothis context. Role of ATO in ascertaining taxes on cryptocurrencies is also discussed in thereport. Furthermore, various measures and steps are taken in order to eradicate tax evasion up toa high extent that will also be explained.Part OneReferred to newspaper articlesPart TwoA) Meaning of cryptocurrencyCryptocurrency is a kind of digital currency for purchase and sale of commodities andgoods through the internet. It is also used by investors' looking for trade in currency for thepurpose of earning profits in the best possible manner. Moreover, investors' may also usecryptocurrency for producing gains on long-term investments in effective manner. This type ofcurrency is different from other regular types of currencies as it is created digitally for thepurpose of exchange and is effectively used by investors to earn profits with much ease. Amongthese currencies, Bitcoin is widely used by private individuals and so, gains can be garnered ineffectual way. Cryptocurrency means that it has decentralised control and as such, they arecontrolled by users as exchange is done by them. These currencies are built in complex protocolsso that investors may be provided with adequate security in the best possible manner andgovernment and banks do not make any decisions regarding cryptocurrency (Rubinstein andVettori, 2018).Moreover, working of these currencies is different as well. It has source codes and othertechnical controls so that it may be securely traded by the interested individuals in effectivemanner and thus, due to high security, cryptocurrencies are difficult to trade with as well. Thegoverning concepts of these currencies are numerous. In relation to this, first concept is block-chain. It is type of ledger which stores information of all previously done transactions and assuch, at a given time period, units of currencies are validated of investors (Clements, 2018).Another concept of cryptocurrency is that private keys are there for every individuals forauthenticating respective identities in effective way. Moreover, there are wallets having unique1
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