Koinly, a free tax software for crypto, has entered the Australian market. Initially in the UK in 2019, Koinly imports crypto transactions, finds past and current market prices, matches transfers between wallets, calculates gains/losses, and generates yearly tax reports. Koinly’s tax calculator can identify your taxable transactions from your non-taxable transactions, calculate capital gains and losses, and the fair market value of income from crypto in AUD.
What is the market offering of Koinly?
Koinly connects with over 1,000 exchanges, wallets and blockchains and cryptocurrencies including Binance, CoinJar, CoinSpot, Digital Surge, Swyftx and many more.
Despite Australian crypto investors last month joining the Bitcoin ETF bandwagon, with the country’s first physically-backed Bitcoin ETF in Australia, listed on Australia’s Cboe platform –they weren’t immune to the recent nosedive across global crypto markets.
Koinly’s Head of Tax Danny Talwar explains how now more than ever crypto investors need all the tools they can get to help navigate tax time and market volatilities.
“These periods of volatility are expected as the tech and market that underpins crypto becomes more understood and matures. Over time things will become more stable. Crypto is here to stay and now more than ever investors are needing support, to steer through the complexities of tax obligations when it comes to crypto investments,” said Talwar.
What is the state of crypto taxes in Australia?
In Australia, crypto is seen as an asset and attracts both Capital Gains Tax and Income Tax. The ATO announced they will be focusing on crypto investments come tax time. Investors selling, trading, spending and gifting crypto will need to pay Capital Gains Tax on any profits.
While transactions like airdrops, referral bonuses and earning new tokens through DeFi protocols attract Income Tax. So, if you’ve sold, traded or earned interest from crypto in the last financial year, you will need to declare your crypto totals on your income tax return.
The Australian Taxation Office is rapidly becoming more proactive in monitoring compliance. In 2021, it issued warning letters for crypto investors to report all gains, reminding them of potentially severe penalties of up to 75% of their outstanding tax liability if they don’t.
Yet, a large proportion of crypto investors are still unaware that their crypto is taxable. Danny Talwar explains: “With some collectors suffering devastating losses in the last week, we want to make sure any additional hurdles that you do have control over –like taxes –can be done with ease as possible and in alignment with the multitude of ATO rules and regulations.”
Why is Koinly a necessity as a crypto tool?
With headquarters in the UK, Koinly is a business with remote teams across Australia, Europe, the UK and the US. As Koinly caters to the tax laws of over 20 major countries, its tax reports are underpinned by a raft of personalisation settings and a team of tax law experts.
This ensures taxpayers in any country can build a tax report that’s compliant with their nation’s tax office -including the ATO. Koinly founder Robin Singh said: “When faced with the challenge of dealing with my own crypto taxes, I discovered a frustrating gap in the market.”
“While various apps and tools existed, none were able to do the complete job. Like most early investors, I was left using spreadsheets and calculators to calculate taxes,” Singh said.
Danny Talwar further commented: “Crypto tax is complex and calculating your tax obligation manually can be a tedious process. You would have to download CSV/Excel files, format data, figure out market prices on particular daysand develop your own tax calculations.”
“Koinly solves all these problems and more, and we are thrilled to be expanding our offering into the Australian market. One in five Australians own crypto, and we’re excited to help them streamline and simplify allthe tax admin that goes along with it. It’s vital that we treat crypto like any other investment: tax obligations included,” Danny Talwar concluded.