The tax implications of crypto trading are not yet well understood. Every time you sell or swap one cryptocurrency for another, a capital gain event is likely to have occurred, and knowing how to record your crypto transactions can be a challenge.

Depending on your level of crypto trading calculating the capital gain or loss made on each sale can be a timely process. This is due to a number of factors such as –

  • The total number of crypto transactions made during the financial year – for some it’s hundreds or thousands.
  • The dates and amounts for both the original purchase and sale are required.
  • At times you might only dispose part of your holding at a time, requiring an apportionment of the original cost to be applied to the sale.
  • At times you may also be swapping one coin directly for another coin, each swap is considered as a buy & sell transaction.
  • You may also be purchasing a number of coins at once as part of a bundle purchase.

Most platforms used to trade cryptocurrencies (such as Coin Spot, Coinbase & Swyftx) provide you with a year end trading report, however generally these reports just give you a transaction listing for each buy and sell made using that platform. They don’t actually calculate the capital gain or capital loss made on each transaction for that financial year. Asking your accountant to manually work through the year end report generated by your trading platform is a timely process and will result in a significantly higher fee for the time taken to prepare your income tax return.

Fortunately there are now some third party software providers that can assist if you are happy to upload or link your trading data. We do not endorse any particular provider but have provided some sites that we’ve seen clients using to date:

It’s important that you do your own research before you subscribe to a particular service as there are different packages and options – such as allowing direct access to your trading platform to automatically obtain future transactions.

Also be mindful that it’s fairly new territory and the software might not be perfect. It’s always your responsibility to review the report to ensure that it is accurate and reflects your trading activity. We haven’t noticed any major issues so far, although we’re aware there may be reporting inaccuracies where clients have transferred the coins from one wallet to another and not necessarily sold them.

The subscription cost to these platform will be tax deductible so please remember to keep a copy of your invoice.

Other related blogs:

Tax treatment of crypto trading
Buying Bitcoin will I pay tax?

Author: Rhys Frewin





In June 2020, the Australian government announced new director ID rules and established the Australian Business Registry Services (ABRS) which will be responsible for the implementation and administration of the new Director ID regime. This regime introduces the Director ID – a 15 digit unique identifier given to a director, or someone who intends to become a director. This identifier stays with the individual permanently.

Purpose of a Director Identifier Number (DIN)

The DIN is the first service to be implemented by the ABRS, which aims at creating a single source of reliable information. The aim is to help:

  • Prevent the use of false or fraudulent director identities
  • Make it easier for external administrators and regulators to trace directors relationships with companies over time
  • Identify and eliminate director involvement in unlawful activity such as phoenix activities

Who needs a Director ID and when?

You will need a Director ID if you are an eligible officer of:

  • A Company, a registered Australian body or a registered foreign company under the Corporations Act 2001.
  • An Aboriginal or Torres Strait Islander corporation registered under the Corporations Act 2006.

You can apply for a Director ID now. If you plan to become a director, you can apply before being appointed. Below are some important deadlines for having your Director ID.

Date you become a director Date you must apply
On or before 31 October 2021 By 30 November 2022
Between 1 November 2021 and 4 April 2022 Within 28 days of appointment
From 5 April 2022 Before appointment

Applying for a Director ID

The process is not difficult provided you have set up your myGovID first. In order to set up your myGovID online, you will be required to provide information such as your TFN, address and two documents to verify your identity. Alternatively you can call the ATO or complete a paper form and lodge it with certified documents.

Once you get your ID you keep it forever even if you cease to be a director. Any details that change after applying for your Director ID may be changed through the ABRS website.

If you’re currently a director of a company, or about to become a director you may as well apply for your Director ID now. There’s little point in deferring and risking a penalty down the track.

Visit the ABRS website for more information about director ID.

Related blogs:

What company debts can a directors be personally liable for?

Author: Caleb Datson



With a market value of more than $2 trillion US dollars it is no wonder investors, share traders and even your friends are swarming to the digital gold rush that is crypto trading. However it is important to understand the implications that holding and trading cryptocurrencies such as Bitcoin and Ethereum may have on your annual tax return.

The term cryptocurrency is used to describe a digital asset that cannot be easily created through the use of encryption techniques and verification from multiple networks (called the block chain) to ensure the validity of the asset. As a result of these techniques, cryptocurrencies operate independently from the central bank and government.

There are three different ways the ATO will treat cryptocurrency depending on how and why you are holding it.

The first and most common is the treatment when held by an investor. For most people (investors) your cryptocurrency will be held on a capital account meaning you will not have to pay tax when you purchase a cryptocurrency or if there is a change in market value while you are holding it. However when you do decide to sell or dispose of your cryptocurrency you may have to pay capital gains tax (CGT). Even if you sell a currency and immediately buy another, this is still considered a sale for CGT purposes. An advantage of holding crypto on capital account is that if you hold it as an investment for more than 12 months you may be entitled to a 50% CGT discount (which means you’ll only pay tax on half of the gain).

The second (and less common) approach is when cryptocurrency is deemed to be trading stock. This is where the holder is classified as a share/crypto trader (someone who undertakes business activities for the purpose of earning income from buying and selling shares and/or crypto) and is held instead on revenue account. Proceeds from the sale of cryptocurrency instead are deemed ordinary income and the cost of acquiring cryptocurrency a deductible business expense. An advantage of holding cryptocurrency as a trader is that your losses from the sale of crypto can sometimes be offset as a deduction against your other sources of income whereas losses from the sale of crypto on capital account can only be used to offset other capital gains.

It is important to understand that you can’t choose between these two methods. You are taxed as either a trader or an investor based on the facts. To determine if you are a trader, the ATO looks at the following factors:

  • What is the nature and purpose of your activities, is the intention to make a profit and is there a business plan in place?
  • How repetitive, regular and voluminous are your activities? The higher the volume the more likely a business is being carried on. A business would be regularly and routinely trading cryptocurrency.
  • Are your activities organised in a business-like way? This primarily relates to the record keeping of share/crypto transactions. Does the share/crypto trader produce annual reports and have qualifications, expertise or training in the market.
  • How much capital is invested? The size of holdings compared to personal capital may be taken into account when determining if someone is a share trader or simply an investor. However this is not a critical factor as it is possible to carry on a business with very little capital.

The third way is when cryptocurrency is classified as a personal use asset, whereby capital gains or losses that arise from the disposal of these assets may be disregarded. Cryptocurrency is considered a personal asset only when it is kept and used primarily to purchase items for personal use only.

Other related blogs:

Buying Bitcoin will I pay tax?

Author: Rhys Frewin

You may be able to claim personal super as a tax deduction when you contribute your own after tax money into your super fund. Making a personal contribution into your superfund can have several benefits, including savings on tax and increasing your superannuation balance for retirement.

In order to claim a deduction for personal contributions (known as concessional contributions), there are a few steps that must be completed:

  1. You need to deposit your contribution into your superannuation account before the end of the financial year (recommend well before 30 June as it can take some time to process).
  2. You must notify your superfund that you intend to claim a tax deduction. To do this, you should complete a ‘Notice of Intent’ and send it to your fund.
  3. You will then receive back an ‘Acknowledgement letter’ from your superfund. This allows you to claim your contribution as a deduction in your tax return.

Pro tip: If you’ve made a personal concessional contribution into a fund and are rolling funds from that fund to a new fund, you must lodge your notice and receive an acknowledgement from the old fund before doing the rollover. If you wait until year end, your old fund will no longer exist if there is no balance remaining. There are also issues with getting a notice of intent if you partially rollover or withdraw within the year as only partial amounts may be deductible for the contribution made during the year. If you think this may apply to you, please see the link below for more information.

Unfortunately not everyone is eligible to claim a deduction for personal concessional super contributions as there are age restrictions. The below shows the different age criteria for making concessional contributions.

  • Under 67: You can make concessional contributions.
  • 67 to 74: You must pass a work test to make concessional contributions.
  • 75 and over: You cannot make concessional contributions.

Additionally concessional contributions from all sources (including what your employer contributes for you) are currently limited to $27,500 per person per year.

If you are thinking about putting extra money into your super and claiming a tax deduction, and are still unsure if you will be eligible or if it will be beneficial in your circumstances, see the link below for more information.

Other related blogs:

What happens if I make excess contributions to super?
Contributing to super – options for employees
Carry forward concessional contributions – what are the rules?


Author: Caleb Datson

Many businesses breathed a collective sigh of relief when the Instant Asset Write Off (IAWO) Scheme was first introduced, due to changing market conditions at the height of the COVID-19 pandemic. The scheme, which has now been extended to 30 June 2023, allows eligible entities to claim an immediate deduction for many depreciable assets, rather than expensing them over their effective lives.

The new rules have been designed to offer temporary tax relief while encouraging businesses to bring forward investments that they may have been looking to make over coming years.

There are some items that need to be considered before utilising these measures, as it may not necessarily be the most tax effective approach in the long run. These are:

  • Cash flow should be reviewed, as investing in an asset sooner than predicted could lessen the funds available for the day to day running of the business now and in future years.
  • Marginal tax rates should be considered. A deduction may result in taxable income dropping into a lower tax bracket. This means that you may not be able to take full advantage of the deduction and it may be less tax effective than traditional depreciation methods.
  • Claiming an immediate deduction will also decrease taxable income to an unusually low rate. This in turn may artificially decrease PAYG instalments the following year, resulting in a larger than usual tax bill.
  • Businesses are advised to look at the long-term effect that IAWO may have on taxable income in comparison to spreading the deduction over the effective life of an asset. If your business is in a break even position, or operating at a loss, there is no real benefit to claiming the deduction out right.
  • When an asset, such as a car, is fully expensed when purchased, it must be remembered that the proceeds on sale need to be declared in full if this asset is sold. This could result in a higher than usual tax bill.
  • If the simplified depreciation rules are used by a Company, and a tax loss results, this loss cannot be distributed to shareholders.
  • If the business is operated by a Trust and goes into a loss position, franking credits on any dividends received will not be able to be utilised.

As always, it is important to consult your Accountant when deciding which approach to take and they will be able to assist you to opt out, should you wish to.

Related Blogs

$150,000 Instant asset write off – do I have to use it?
Company carry back losses – what are the rules?

Author: Joanne Humphreys


The super guarantee system, where employers now contribute 10% of wages to super for their employees has been largely successful in providing better retirement incomes for working Australians since its 1992 introduction.

It’s also had its fair share of problems, one of those being that employees end up with multiple super accounts (there’s currently around 6 million) as they move jobs. Many of these accounts end up either lost or eroded by fees and insurance premiums.

Under current rules, if you start a new job and don’t nominate a super fund, your employer will open a new account in a default super fund selected by the employer.

New rules will commence from 1 November 2021 whereby you will keep the same stapled super fund when you move from job to job – i.e. your fund will be “stapled” to you (sounds like a malicious office incident). Treasury has estimated that Australian workers will save $2.8 billion over the next 10 years under these stapling arrangements.

All employers will be obligated to apply these rules for new workers that commence from 1 November. If you’re an employer, here’s what you’ll need to do.

First, within 28 days of their start date, you’ll have to offer your new employee the usual choice of fund using the Super Standard Choice Form. No changes there. If they fail to nominate a fund, you’ll need to log into ATO online services and provide some basic information about the employee. The ATO will respond to you online within minutes, and if the employee has a stapled fund you must contribute to it. They will also advise the employee that the request was made.

If for some reason the employee doesn’t have a stapled fund, then you can add them to your default fund.

Oddly, employees with multiple super accounts don’t get a say in which fund becomes their stapled account. The ATO will determine this using tiebreaker rules set out in the legislation. Generally the stapled fund will be the fund the employee last received contributions into, otherwise the rules look for the largest account balance, then the newest creation date.

To override the tiebreaker rules an employee will need to use the Super Standard Choice Form when they commence employment.

Employees should also be aware of the new YourSuper tool which enables them to compare super funds ranked by fees and investment returns, with a prompt to consolidate accounts if they have more than one. You can also search for any lost super through your myGov account.

Related blog:

Penalties for late payment of super guarantee
Contributing to super – options for employees

Author: Mark Douglas




A re-contribution strategy involves withdrawing a lump sum from your super fund, paying any necessary tax on the withdrawal and re-contributing these funds back into super as a non-concessional (after-tax) contribution.

The revised superannuation balance will potentially consist of all, or more, tax-free component, which may ultimately reduce the tax payable when funds are withdrawn my a member or paid to beneficiaries upon death.

This opportunity may best arise between ages 60-65 when members can draw superannuation out without incurring tax, and still have the ability to meet the contribution rules.

To determine the validity of a re-contribution strategy, it is important to understand if your superannuation benefits are categorised as tax-free and/or taxable components.

  1. Tax-free components

The tax-free component of your super balance is generally the contributions on which you have already paid tax, so you don’t pay tax on them again when they are withdrawn. Tax-free components include your non-concessional (after-tax) contributions.

  1. Taxable components

The taxable components of your super balance are generally your concessional (pre-tax) contributions such as super guarantee (employer contributions) and salary sacrifice contributions.

Ultimately, you want your super balance to have a high tax-free component and a lower taxable components to reduce the potential tax payable when your super is paid out of your super fund upon a condition of release being met.

Disadvantages of a re-contribution strategy

  • This strategy may cause your assessable and taxable income to increase for a particular financial year. A higher assessable income and taxable income may lead you to pay more tax.
  • You also may be liable to pay tax on the lump sum withdrawal from superannuation if you are aged below 60.
  • When re-contributing, any amount that is in excess of the non-concessional cap will incur a penalty tax. The non-concessional (after-tax) contribution cap is $100,000 in 2020-21 or $300,000 if you are eligible to use a bring-forward arrangement.
  • Withdrawing a lump sum and re-contributing into your super account could affect both your total super balance (TSB) and transfer balance cap. As at 30 June 2021, your TSB needs to be under $1.6 million to make a non-concessional contribution.

Related blogs:

What happens if I make excess contributions to super?
How can you access your super?

Author: Jesper Lim


Taxable Payments Annual Reporting (TPAR) is where businesses report to the ATO the total payments they make to contractors for services in a financial year. The contractors can operate as any entity structure – sole trader, company, partnership or trusts. The TPAR does not result in additional payments or tax; it is simply reporting information to the ATO.

The ATO uses the information reported to data match what is declared on contractors taxable income and activity statements. The ATO will then know if contractors have failed to lodge a return or activity statement, failed to register or declare GST on their activity statements or haven’t declared their full revenue on a tax return.

Not all businesses need to prepare Taxable Payments Annual Reporting each year. It is only a requirement for industry specific businesses which include:

  • Building & construction services
  • Road freight & courier services
  • Cleaning services
  • IT Services
  • Security, investigation & surveillance services

Not all payments a business makes need to be reported on TPAR; it is only for payments to contractors for their labour. You do not need to report payments for materials, incidental labour, invoices unpaid at 30 June, payments within a consolidated group and contractors without an ABN.

For each contractor you need to report the following:

  • ABN
  • Address
  • Name (Business name/ Individual name)
  • Gross amount paid
  • GST paid (if applicable)

It is important to keep records of the above when payments are made to contractors to make completing the TPAR a lot faster, rather than having to chase information from contractors when the report is due.

TPAR needs to be lodged by the 28th of August after each financial year and penalties can apply if the reports are lodged late. The form can be lodged through a few different methods – paper form, lodging through an accounting software and lodging through the online business portal.

Other related blogs:

Employee or contractor – the risks of getting it wrong
When do I need to pay super for contractors?

Author: Rhys Frewin


Understanding the tax consequences of buying a work vehicle can be complex and confusing.

The general concept is that if you buy a motor vehicle for work related travel, you are able to claim the work portion of the expenses incurred as a deduction, however under current temporary tax measures there are some circumstances where you can claim the cost of the vehicle.

How you claim a deduction for these expenses depends on many factors, such as if you are an employee or sole trader, what type of vehicle you purchase and if there is any private use of the vehicle. See below for a discussion on the factors which determine what method will be most tax effective for your situation.

Cents per kilometre vs logbook method

If you are an employee or a sole trader, you can either claim your car expenses using the cents per kilometre method or the log book method.

Under the cents per kilometre method, you can claim up to 5,000 kilometres of work related travel at a rate prescribed annually by the ATO. For 2021, this works out to a maximum deduction of $3,400. This method requires the least amount of administration as you do not require written receipts to substantiate your claim, but you do need reasonable evidence that you actually traveled the kilometres for work purposes.

The other method to claim car expenses is known as the logbook method. To claim under this method, you need to keep a logbook for 12 continuous weeks detailing all your work related travel to give you a log book percentage. If the logbook states your travel is 70% work related for example, then you can claim 70% of all your vehicle expenses, including depreciation of the vehicle and financing costs. The logbook is valid for 5 years, unless your circumstances change.

One key difference between these methods is that you cannot claim anything for the capital cost of your car under the cents per kilometre method. This is because the prescribed ATO rate already takes the car depreciation into account. On the other hand, the logbook method allows you to claim a depreciation deduction for the work-related portion of the cost of the vehicle.

Further, if you are a sole trader and use the small business concessions, you are currently eligible to claim the work-related portion of the full cost of the car in the year of purchase. The flip side to this is you will also need to declare the proceeds on the eventual sale of the vehicle as assessable income, which is taxed at your marginal tax rate in the year of sale.

Car vs Ute or Van

If your vehicle isn’t considered to be a car for tax purposes, you cannot claim using the cents per kilometre method. Rather, you must claim the portion of your vehicle expenses that relate to work use. A vehicle is not considered to be a car if it has carrying capacity of one tonne or more, or if it is able to carry nine passengers or more (for example, some utes and vans). The ATO states you do not need to keep a logbook to determine the work related use percentage for these vehicles, but it is recommended. It is important to note that not all utes and vans satisfy these conditions, so it is important to confirm the carrying capacity for your vehicle.

Car Cost Limit

If you are claiming car expenses under the logbook method, you can claim the work related portion of the cost of your vehicle up to the car cost limit. This is the maximum value you can use to calculate your depreciation claim. The car cost limit changes yearly – for 2021 it is $59,136 (GST inclusive). As an example, if you are a sole trader registered for GST and purchased a car in the 2021 year for $80,000, the most you can claim is 10/11ths of the car cost limit as a depreciation deduction, which is $53,760. You are also entitled to claim back $5,376 as a GST credit.

Related blogs:

Claiming vehicle expenses using a logbook
New guidelines for FBT exempt motor vehicles



“We make a living by what we get. We make a life by what we give.” Wise and inspirational words from Winston Churchill.

Around four million taxpayers each year make almost $4 billion of tax-deductible donations to various charities around the country. West Australians top the list for the average amount of donation per person. But not everyone understands the rules around the deductibility of donations.

Those that give may be rewarded through our tax system by receiving a tax deduction for donations given to certain organisations, known as Deductible Gift Recipients (DGRs). But like many components of our complicated tax system, the integrity of the rules is exposed to misunderstanding and misuse.

In the 2019 year, nearly two thirds of the charitable donation claims that were adjusted by the ATO were because the taxpayer could not prove they had made the donation. For this reason the ATO has put out a timely reminder, listing the four main reasons that donations may or may not be tax-deductible.

Firstly, the donation can only be deductible if it is made to an organisation that is endorsed as an Australian registered DGR. An organisation’s DGR status can be checked using the on-line ABN lookup tool at It’s important to understand that not all charities and not-for-profits are DGRs.

Crowd-funding is proving popular as a modern means of charity, but crowd-funding contributions will rarely be tax-deductible unless the funding organisation is a DGR. Foreign charities are also often not registered as an Australian DGR.

Secondly, donations are generally not tax-deductible where the taxpayer receives or expects to receive a monetary or personal benefit in return. Common examples include buying raffle tickets or chocolates for fundraising purposes, although receiving a token like a pin, wristband or sticker will not deny you of your deduction. Some crowd-funding models also provide reward in return for payments and would therefore not be deductible, regardless of DGR status.

The third reason is based on record-keeping. Most charities issue receipts for donations, but some don’t. Where you have third party evidence like a credit card statement that makes it clear you have donated to a DGR, the ATO will likely accept your claim. They’ll also accept a claim for bucket collections of $2 or more without receipts up to a maximum of $10 per year.

Lastly, the ATO says that some people incorrectly claim deductions for donations they intend to make in their will, or claim for workplace giving that has already reduced taxable income through the payroll system.

Donations made by the executor of a deceased estate are never tax-deductible, so if this is part of your estate planning strategy you should chat to your tax advisor to ensure you get the best outcome.

Related blog:

Is my donation tax deductible?

Author: Mark Douglas