"Tax laws in this area are very poorly understood. People think if you never cash out into Australian dollars, you don't have to pay any tax in Australian dollars," senior accountant at Godbee Favero, Byron Raal, says.
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When individuals sell or transact in cryptocurrencies like Bitcoin, they are liable for capital gains tax.
When cryptocurrencies are related to business or profit-making purposes, however, profits made when those assets are sold can be considered ordinary assessable income, the Tax Office warns.
It means businesses with any crypto transactions must keep detailed records of the dates, the amounts in Australian dollars at the time, what a transaction was for and who the other party involved in the sale.
"You need documentation of that revenue, how much and when you received it," Raal says.
The popularity of cryptocurrency trading also means thousands of Australians have dabbled in trading digital assets. Investors may have different tax rules applied compared with those that regularly buy and sell assets for profit, Raal says.
"For investors, CGT rules apply when an asset is sold. For traders who buy and sell between currencies regularly, gains are calculated on every trade and the net profit is treated as ordinary income."
Hall & Wilcox partner Anthony Bradica believes business owners and individuals will have their digital assets scrutinised this tax time.
"I think there will be a fair bit of audit activity on the horizon - it is hard to say whether the ATO will throw the book at people. But that audit activity will be designed to reveal a mismatch between disclosure [of taxable assets] and what is really the case."
An Australian Taxation Office spokesperson said if unsure about how digital assets are taxed, individuals and business owners should check with their tax agents.
Emma is the small business reporter for The Age and Sydney Morning Herald based in Melbourne.