KPMG has developed the Crypto Tax Estimator, a digital tool that connects directly into Independent Reserve, a cryptocurrency exchange, allowing traders to estimate tax obligations on their portfolio.
The Crypto Tax Estimator is an Application Programming Interface (API) that enables Independent Reserve to provide their users an estimate of their potential tax exposure in real-time, based on the users’ buy/sell transactions on the exchange, covering all cryptocurrencies exchanged on Independent Reserve, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin and XRP.
“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,” said KPMG head of blockchain services, Laszlo Peter.
“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.”
Independent Reserve chief executive Adrian Przelozny said despite other tools available on different platforms, the Crypto Tax Estimator was the first API to be directly connected to a cryptocurrency exchange.
“The 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,” said Mr Przelozny.
“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.
“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.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.