Hi
I'm a sole trader from Australia and I am wondering what the tax consequences will be if I turn my Steem Dollars into AUD?
It sounds like we are talking possibly a capital gains tax, but I didn't buy this cryptocurrency and instead made it on here so I'm not too sure what the consequences are, if that means the whole lot is assessed as a "gain" and gets taxed, and also what difference being a sole trader makes to this whole situation.
Does anyone know what the tax treatment is in the case of Steem Dollars in Australia for a sole trader?
Thank you for your help
Regards
Birchmark
I think the jury is still out on that one, mate.
I believe overseas earnings aren't taxable; so powering up for a few years, then taking a 13 week working holiday might be a viable option?
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thanks. Yeah I wasn't sure on it at the time I posted this, but after looking a bit more, given I'm a sole trader I'm thinking it falls under the business rules of that instead of capital gain upon selling being the issue it is income at the value it was when earned (so when redeemed on here). I'm not 100% sure though since a sole trader is in that weird spot where it is a business but in some ways you are treated like an individual (like how sole traders have only the one tax return and business income is just part of the personal tax return). It seems the most logical for my situation though based on the information the ATO provides for Bitcoin.
Not sure on the overseas earnings bit, because I've heard that you don't too, but at the same time, I'm sure I have to tell them about any Upwork work despite many of the clients being from other countries (and our govt even takes GST out of what I get on that as they take Upwork's 20% cut as a services fee so they then take 10% of Upwork's cut off as well meaning Australians and I guess countries with VAT probably too earn less than countries that don't force their sales tax on other countries' businesses). I know if I didn't have an ABN for Upwork the tax was apparently going to be much worse. I think it depends on the source of the income beyond just the geographics unfortunately.
Thanks for your comment. I think I'm right about it being income based on the information the ATO provided but it would be nice to be completely certain about it.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
More interesting question as a possible business will you have to charge others GST on the steem tokens you created or will steem need to register GST and collect it on ATO's behalf. Also given they currently seem to view steem as an asset will CGT need to be paid when switching between the various steem tokens or when delegating or upvoting! All good questions for your accountant. At least all your earnings are publically listed and available for all to see! https://www.ato.gov.au/general/gen/tax-treatment-of-crypto-currencies-in-australia---specifically-bitcoin/
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I'm assuming not as we aren't paying each other for goods and services on here. It is more like Steemit is gifting Steem to people according to their upvotes etc. I'm under the GST threshold so it is a non-issue for me atm but I don't think we are technically paying each other for goods and services via upvoting so I don't think GST should apply. If we then go and buy something with Steem or Steem dollars that's a different situation, as that definitely is paying crypto for goods, but I don't think the payments from here itself are the same as a transaction that would incur GST.
From what I've read on the ATO's site about carrying on a business using crypto though, it says for individuals yes it is an asset and CGT will apply, but for a business it is business earnings regardless of if it gets turned into AUD or not. So CGT in this situation isn't relevant so much to a business but instead every time I redeem rewards that is income at its value in aud at the time. It's income instead of an asset under the information about carrying on a business using crypto. As an individual though, CGT is something you have to be mindful of when transferring between currencies. As for the accountant bit, Birchmark is a tiny sole trader home business and I can't afford an accountant so I have to work this out on my own.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit