Crypto Tips for Small Businesses

Crypto Tips for Small Businesses Blog Cover

Hello Chasers,

Crypto is becoming more mainstream within the small business community, including small business owners who pay salary and wages in crypto and/or receive it as payment, and established traders who buy crypto stock as a business investment.

It is therefore important that taxpayers understand how crypto assets may have an impact on their tax obligations.

The ATO has the following crypto tips for small businesses:

  • where taxpayers run a crypto business, the cost of buying crypto assets is a deductible expense.
  • where taxpayers are paid in crypto assets for their services, the monetary value of the
  • crypto assets is classified as ordinary income of the business;
  • where taxpayers are using crypto assets to pay salary or wages under a valid salary
  • sacrifice arrangement with their employee, this is a fringe benefit; and
  • the tax treatment of a profit made from the sale of crypto will depend on whether the taxpayer is carrying on a crypto asset business or rather is an investor, as follows:
  1.  If the taxpayer is carrying on a crypto asset business, the crypto assets are treated as trading stock and the proceeds of selling them are assessable as ordinary income.
  2.  If the taxpayer held the crypto assets as an investment, the sale of the crypto assets is a CGT event.

You should keep records of your crypto transactions to prevent damage and protect information from being changed. Refer to Keeping Crypto Records on the ATO’s website for information on what records they need to store.

Have a great day!

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