“I am actively telling people they are best ignoring it,” Cadena Legal’s founder tells Cointelegraph after controversial new tax guidance on DeFi was released in November.
Australia’s controversial new guidelines for cryptocurrency taxation should be ignored for being unclear and should probably be seen as “toilet paper,” according to an Australian law firm.
On Nov.
In a Nov.
If you hate the ATO’s recent web guidance on crypto, read this:https://t.co/JA5GYsDVFt
— Harry Dell taxpapi.eth (@harrydelltaxlaw) November 27, 2023
The law firm noted there is a lot of confusion about what Australians can do with DeFi without triggering a capital gains tax (CGT).
“If the ATO released a public ruling, we could all rely on that, but instead we have this non-binding nonsense which makes everyone more confused and will probably reduce willing tax compliance by the Australian crypto community.”
Dell, who previously worked at the ATO auditor between 2017-2019, said he’s even telling his clients to ignore the rules for the time being:
“[It] is inciting panic in the Australian crypto community. I am actively telling people they are best ignoring it and get their own advice.”
One crypto tax pundit, however, warned that ignoring ATO guidelines could be risky, arguing that while they aren’t legally binding rules, an investor may still need to pay a lawyer to fight the ATO should they determine it falls foul of their guidance.
On Nov. 21, Cointelegraph attempted to find out from the ATO whether transferring funds via a bridge or staking Ether (ETH) on a liquid staking protocol such as Lido constituted a capital gains tax event.