Tax experts are calling on authorities in Australia to overhaul the law around the taxation of cryptocurrencies, after reports of individuals receiving surprise bills from the state.
Speaking on behalf of Crypto Tax Australia, Director Adrian Forza said the state of Australian tax laws left one of his clients facing a A$100,000 tax liability—despite only buying A$20,000 worth of cryptocurrency, Australian news outlet Micky reported.
Forza was quoted by the news outlet saying the case can be attributed to Australian tax laws, which specify that cryptocurrencies are taxable based on their value when received—not when purchased or spent.
Forza explained how the client in question had received cryptocurrency in exchange for development work for overseas clients, across a period spanning the collapse of SegWitCoin (BTC) in 2018. This saw the client forced to declared crypto holdings of A$250,000, despite the same cryptocurrency being worth just A$20,000 by the time he came to file his tax return.
Forza described the situation as “a disaster” for those involved in cryptocurrency in Australia, saying:
“It was a disaster. That’s a really unfair outcome because he’s basically received cryptocurrency and the value has dropped significantly and now he has to pay tax on money he doesn’t have. This is something they will have to change as it is unfair.”
He also highlighted discrepancies in how the Australian Tax Office (ATO) values cryptocurrencies like ETH and Bitcoin SV, effectively applying a value of A$0 to the cost of acquisition—a position the tax authorities explain as reflecting the value of cryptocurrencies created from hard forks.
This means that investors are liable for tax on 100% of capital gains in the case of these cryptocurrencies, a huge disincentive for Australian crypto users and investors to sell Bitcoin SV.
In response, Forza called for greater clarity on the rules around taxing cryptocurrency in Australia.
“In the crypto space people think of Ethereum as the original, but the ATO has said that Eth is the one that changed and ETC kept all of its original properties. Any coins you received as a hard fork that will have a cost base of zero,” he said.
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