Australia’s new cryptocurrency taxation guidelines have been criticized by an Australian law firm, which suggests that they should be disregarded as they are unclear and essentially worthless. The Australian Tax Office (ATO) released non-binding guidance on November 9, which could impact how investors and traders report their taxes in relation to decentralized finance (DeFi). The law firm argues that this guidance should be treated as “toilet paper” and highlights the confusion surrounding the tax implications of DeFi activities. The firm’s founder, Harrison Dell, who previously worked at the ATO, advises clients to ignore the rules for now and seek their own advice. However, another crypto tax expert warns that ignoring the ATO guidelines could be risky, as investors may still need to engage legal representation to challenge the ATO’s position. The ATO has not provided direct answers to queries regarding specific activities such as transferring funds via a bridge or staking Ether on a liquid staking protocol. Dell believes that these activities are likely to trigger a capital gains tax event based on his experience with private rulings. He suggests that the rules will remain unclear until a public ruling is issued or new legislation is proposed. In the meantime, Dell anticipates that litigation will be necessary to bring clarity to the situation, although this process is expected to be time-consuming.

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Information Details
Geography Australia
Countries 🇦🇺
Sentiment negative
Relevance Score 1
People Harrison Dell
Companies Australian Tax Office (ATO), Cadena Legal
Currencies None
Securities None

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