Opinion: Crypto tax guidance issued by the Australian Taxation Office is like “toilet paper” and non-binding

The Australian Taxation Office (ATO) recently issued guidance that may affect the way investors and traders involved in DeFi pay taxes. Australian law firm Cadena Legal said the cryptocurrency tax guidance is “non-binding” and could be viewed as “toilet paper.” Cadena Legal founder Harrison Dell said: “If the Australian Tax Office issued a public ruling, we could all rely on it. But instead we get this non-binding nonsense, which leaves everyone even more confused and likely to Reducing the Australian cryptocurrency community’s willingness to comply with tax.” (Cointelegraph) According to previous news, the Australian Taxation Office (ATO) issued new guidance on November 9, recommending the imposition of capital gains tax (CGT) on a range of DeFi transactions. The new guidance states that capital gains tax will need to be paid when a user transfers tokens to another address or smart contract that does not have “beneficial ownership” or if the address has a non-zero token balance. While the standard hints that the rules may cover liquidity staking, the Australian Taxation Office’s guidance does not clarify some confusing issues, such as whether users staking Ethereum on Lido or sending tokens across chains through L2 will need to pay tax. Without the rules being clear enough, assuming an Australian DeFi user buys ETH for $100 and then stakes it or sends it via a bridge to L2 when the price is $1,000, they risk paying tax on their $900 "profit" even though they Haven't sold ETH or realized a profit yet. An ATO spokesperson said the taxation status of a transaction will depend on the steps a user takes on the platform or contract, as well as the relevant facts and circumstances of the taxpayer who owns crypto assets.