The use of cryptocurrency in everyday business is beginning to see increased traction. If you are a business owner who has accepted payments for goods or services in cryptocurrency then barter transaction rules will apply. The ATO requires that careful records are kept for each payment made or received.
All payments made or received are treated as barter transactions.
You must keep detailed records of the time of transaction, value, quantity and involved parties.
The ATO has advised that it is up to the business to keep detailed records of each transaction. This is a daunting task and difficult to backtrack if you have not been diligent in keeping records. Digging through old records and valuing past transactions is a time-consuming process. You should expect a specialist accounting firm to have the tools necessary to do these valuations for you, eliminating much of the pain in the process.
Crypto Salaries and Wages
If you pay employee wages in cryptocurrency or intend to do so in the future, then we recommend that you talk with an accountant. Due to cryptocurrency not being a currency, the payment is subject to the provisions of the Fringe Benefit Tax Assessment Act 1986. This has important tax consequences and you should consider if this will be a tax-effective outcome for both you and your employee or contractor.
Cryptocurrency salaries and wages are subject to FBT.
A specialist tax accountant can help you understand the tax-effectiveness of setting up salary or wage payments in crypto currency. Ensure you understand your businesses tax liability on FBT payments.
Kova Tax are specialists in the cryptocurrency taxation and accounting space. When you work with us, you are working with an accounting firm that actually understands crypto and understands how to talk your language. We are passionate about helping you to explore and understand the use of cryptocurrency in your business. Our first consultation is no cost and no obligation.