“Today’s announcement of co‑ordinated international action on cryptoassets is a major step forward, marking another important milestone towards the widespread and co-ordinated approach to combat tax evasion through greater transparency and exchange of information,” Secretary-General Cormann said.

“We strongly welcome the extensive support being shown for quick action to make the international exchange of information collected under the OECD standard on cryptoasset reporting a reality. The international community can count on the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes to ensure that the tax transparency architecture remains both up-to-date and effective going forward.”

The Crypto-Asset Reporting Framework (CARF) is a key component of the International Standards for Automatic Exchange of Information in Tax Matters developed by the OECD under a G20 mandate. It provides for the automatic exchange of tax-relevant information on cryptoassets and comes against the backdrop of a rapid adoption of the use of cryptoassets for a wide range of investment and financial uses.

However, the exclusion "does not apply to digital currencies issued by, or under the authority of, a government agency, which continue to be taxed as foreign currency."

ATO said when investing in cryptoassets, trustees must ensure it is allowed under the fund’s trust deed, is made in accordance with the fund’s investment strategy and trustees have considered the level of investment risk given the highly volatile nature of the investment.

On 22 June 2022, the Australian Government announced it would introduce legislation to exclude cryptoassets such as Bitcoin from being treated as a foreign currency for Australian income tax purposes. The proposed legislation maintains the current tax treatment of cryptoassets and removes uncertainty following the decision of the Government of El Salvador to adopt Bitcoin as a legal tender.

Exposure draft legislation, Treasury Laws Amendment (Measures for Consultation) Bill 2022: Taxation treatment of digital currency, and associated draft explanatory material have been published for public consultation. 

The draft legislation relies on amending the existing definition of digital currency in the GST Act (A New Tax System (Goods and Services Tax) Act 1999) before adopting it as an exclusion from the definition of foreign currency in the Income Tax Assessment Act 1997.

In June, the ATO warned taxpayers to not engage in ‘asset wash sales’ to artificially increase their losses and reduce gains or expected gains. Wash sales are a form of tax avoidance that the ATO is focussed on this tax time.

The statement sets out that if citizens dispose of an asset such as property, shares, or a cryptoasset (including NFTs) this financial year, they will need to calculate a capital gain or capital loss and record it in their tax return.