You might be in a cryptoasset business if you do one or more of these activities:
- cryptoasset mining
- cryptoasset trading (or dealing)
- have a cryptoasset exchange business (including crypto ATMs).
Not all people who are mining or buying and selling cryptoassets are in business. If you’re not sure if you are in the business of mining or trading in cryptoassets you’ll need to work it out.
Mining cryptoassets as a business
Cryptoasset business income
A cryptoasset business generally holds cryptoassets for sale or exchange.
Amounts you receive from selling or exchanging cryptoassets is business income. This also means you’ll be able to deduct the cost of acquiring those cryptoassets from your income.
You might also have to pay tax on some cryptoassets you receive, such as mining rewards.
Trading stock
When you have a cryptoasset business, the trading stock rules apply. This is because a person in a cryptoasset business (such as mining or trading) generally holds cryptoassets for the purpose of selling them in the ordinary course of that business. Cryptoassets are excepted financial arrangements. This means, for trading stock purposes, they are valued at cost.
Paying tax when you’re a cryptoasset business
If you're in a cryptoasset business, you’ll need to work out your taxable income.
Taxing cryptoasset income
If your cryptoasset business is a new business, it’s important you understand your responsibilities to help you get it right from the start.