What is Amber
AmberApp is a user-focused platform designed to enhance the Bitcoin experience. It offers fast, simple and secure ways to purchase, sell, stack or spend Bitcoin directly from your mobile device.
- AmberApp enables users to buy Bitcoin in under 90 seconds, making it one of the fastest crypto investment platforms in Australia.
- With features such as DCA tools and the Lightning Network, investors can easily control their Bitcoin transactions.
- It offers high-level security measures including multi-authentication, encryption and secure delay, thus safeguarding users' accounts and identities.
Do you have to pay tax on bitcoin?
Ever since 2014, when the ATO brought in bitcoin tax guidelines, it's been a known fact that bitcoin is taxable.
As a taxpayer in Australia, it's your legal requirement to declare all income, including that from bitcoin investments. This includes capital gains and losses made on Amber and any other Australian or international platforms.
ATO tax treatment of bitcoin
There are two types of assessable income that your Amber investments are taxed on in Australia:
Capital Gains Tax (CGT): You’ll end up with capital gains whenever you buy bitcoin, and later sell it for a higher price. Capital gains and losses can result from trades, disposals, gifts and many other transaction types.
Example: You buy Bitcoin on Amber and later sell it, creating a Capital Gain that you must declare CGT on.
Ordinary Income: You can easily end up earning income from a number of sources such as staking, referrals, distributions and many more. These sources of income must be declared on your income tax return.
Example: You get an airdrop on Amber, which must be declared as Ordinary Income.
Bitcoin taxes can be tricky. It's important to know what transaction records to keep and how to work out your taxes. This helps you avoid mistakes that could cause an ATO audit.
Penalties for not declaring tax
The ATO, funded by an annual $3.6 billion budget, administers our tax system in Australia. It has a dedicated Black Economy Taskforce to address the shadow economy including bitcoin. You'll end up facing severe penalties for not declaring, including fines, interest charges, and possibly criminal prosecution for tax evasion.
Investors on Amber who skip declaring their bitcoin income are under tremendous risk. The good news is, Australia has one of the highest rates of tax adherence, with over 93.7% of taxpayers fulfilling their obligations, making those attempting to evade taxes a tiny minority.
Submitting your tax returns late can create issues, damaging your good standing with the ATO and Australian Government, and leading to a higher chance of an audit or review. It may also hinder your ability to get a home loan for a property.
Does Amber report transactions to the ATO?
Amber is an Australian registered entity, Amber Labs Pty Ltd (ABN 69 623 875 052). As an Australian digital currency exchange, it's a legal requirement for Amber to register with AUSTRAC, perform KYC and know the identity of their customers. This is important for preventing scammers and criminal activity.
Since 2019 the ATO has been operating a data sharing program with Australian Digital Currency Exchanges. Under the data sharing program, Amber must provide transaction data of their users to the ATO.
In short, the ATO knows about your transaction history on Amber.
You’ll know the ATO has your bitcoin transaction data, as it will show in the prefill report on your tax return. That means it's important that you do calculate and declare your crypto gains, otherwise it’s only a matter of time before you end up under audit by the ATO.
ATO record keeping requirements
To complete your bitcoin taxes each year, there’s some important records that you need to keep. Having these records will help you to calculate and declare your bitcoin tax, and are also your evidence if you need to prove how your bitcoin tax was calculated.
The ATO record keeping requirements for bitcoin require you to keep the following:
- receipts when you buy, transfer or dispose of bitcoin assets
- a record of the date of each transaction
- a record of what the transaction is for and who the other party is (this can just be their bitcoin asset address)
- exchange records
- a record of the value of the bitcoin asset in Australian dollars at the time of each transaction
- records of agent, accountant and legal costs
- digital wallet records and keys
- a record of software costs that relate to managing your tax affairs
The ATO has also advised that records should be kept for at least 5 years.
Amber Account Statements
Amber has made an account statement export available to ensure you can meet your record keeping requirements. You can follow the account statement export instructions from Amber to download a copy of the files.
You can download the following account statements from Amber.
Your bitcoin tax software may also be used to satisfy the ATO record keeping requirements. Syla has been designed to satisfy Section 121.20 and Section 121.25 of the Income Tax Assessment Act 1997, that deals with ATO record keeping requirements.
Syla is an industry-leading bitcoin tax software that can be used for Amber. Syla can be used to record your transactions by File Import. Syla keeps a record of the original source data, in the exact format it appeared on your account in Amber, ensuring you meet your record keeping obligations.
Having your records is just step one, because now you’ll need to calculate the tax outcomes for each and every transaction. You’ll need to make sure you do it accurately, or you’ll be at increased risk from the ATO.
How is bitcoin taxed on Amber?
We all know that bitcoin is taxed, but the exact tax treatment can vary. Understanding exactly how your different crypto transactions are taxed can not only help you meet your tax obligations, but it can actually help you to make smarter investment decisions.
Important: In the following sections we are considering the tax treatment of an individual investor. If you’re a trader or a different entity such as a Company, Trust or SMSF, your tax treatment may vary.
Buy and sell bitcoin
When you buy bitcoin on Amber, it is a purchase of a CGT asset for tax purposes. Whenever you purchase a CGT asset you must record and track the cost base.
When you later sell bitcoin, you’ll need to record the proceeds from the sale. By subtracting the original cost base from the proceeds, you'll be able to calculate and declare the resulting capital gain or loss.
The basic idea works like this:
- If your bitcoin went up: declare the increase in value as a capital gain.
- If your bitcoin went down: report the decrease in value as a capital loss.
- If you held bitcoin over 12 months: it’s eligible for the 50% CGT discount.
The calculations for CGT can get very complicated, which is why our tax team wrote an in-depth guide on how to calculate CGT on bitcoin.
Self-Managed Super Funds (SMSFs) are a separate legal entity with different tax outcomes to individuals. Due to the requirement for the SMSF to pass an external audit each year, it's also important that all bitcoin records are kept in perfect order. Fortunately, you can get an Amber SMSF account that will keep your fund compliant.
The tax treatment for an SMSF entity is different to your individual tax. The biggest difference being that an SMSF is only eligible for a 1/3 (33.33%) discount, rather than the normal 50% discount that individuals are entitled to. Despite some differences, bitcoin held in an SMSF is still treated as a CGT asset that is held for an investment purpose.
When calculating the tax outcomes for an Amber SMSF, it's important to use Australian bitcoin tax software that has an account type specifically designed for SMSFs. This will ensure your SMSF passes its annual audit.
Read more: How to setup a bitcoin SMSF
How to do your Amber taxes
By now, you've likely realised there can be a lot to bitcoin tax, and getting it done correctly can be tricky. Let’s find out how you can actually get your Amber tax sorted.
ATO tax lodgement deadline
Our Australian financial year starts on the 1 July and ends on the 30 June each year, and you can prepare and lodge your tax return anytime after the 30 June up to 31 October.
The tax deadline for individual taxpayers is 31 October. Once you go past that date, your tax return is overdue, and your risk of penalties is increasing.
There is one way that you can easily extend your lodgement deadline though. You can receive an extended lodgement deadline till 15 May when lodging through a registered tax agent.
Some taxpayers find themselves with years of overdue tax returns. Unfortunately, the problem won’t just go away by ignoring it, and it’s only getting bigger in the meantime. With the ATO no doubt using the data collected from Amber more effectively each year, it’s only a matter of time before they catch up with you.
If you do have overdue tax returns, then it’s always worth working with a good tax accountant. They’ll be able to help you get your tax affairs back up to date. In many cases, investors can even end up receiving tax refunds from years of unlodged tax returns.
Self-lodge vs using an Accountant
When lodging your tax return, there’s two ways to go about it. Self-lodge yourself through myTax (myGov), or by lodging through a tax agent.
Self-lodging your tax return is definitely more affordable, as it means you don’t have to pay for an accountant. However, you’ll need to be much more careful about how you calculate and declare your tax outcomes. Follow our comprehensive guide to self-lodging your bitcoin tax.
Using an Accountant does cost more, but it will save you a lot of headache, and you won’t have to worry whether your tax return was done correctly. You’ll also have someone you can ask questions and get tax advice from. If your bitcoin activity is particularly complex, then it might be worth looking at a bitcoin tax specialist to help you.
Regardless of which approach you take, you’ll need some type of tax software for recording your bitcoin transactions and calculating the tax outcomes.
If you’re an Australian taxpayer, then it’s advisable to use tax software built specifically for Australia, otherwise the tax calculations may not be done correctly, putting you at risk with the ATO
How to select bitcoin tax software
When it comes to managing bitcoin taxes in Australia, choosing the right software is crucial for compliance and ease of use.
Tax regulations and compliance requirements vary significantly across jurisdictions, and what works in one country may not be suitable in another. Australian bitcoin investors need tax software that is specifically tailored to the unique aspects of Australian tax law. It's essential that the software not only calculates these taxes accurately but also updates its tax logic as tax laws evolve.
Ensure the bitcoin tax software is built specifically for Australia. Otherwise you may declare your tax incorrectly or overpay more tax than required.
You should also check for the software’s ability to integrate with popular Australian and international bitcoin exchanges. Having good support for Amber is a must, but you should also consider any other platforms you trade on.
Quality integrations are vital for maintaining accurate and complete records of all your bitcoin activities.
Bitcoin tax is complex, so having software that is user-friendly and intuitive will be a big help. Look for software that generates detailed, ATO-compliant reports which can be directly used for tax filings or shared with your accountant. You should also consider the level of customer support offered, and whether it's actually coming from an Australian support team.
If you don't have tax software for your bitcoin yet, then sign up for an account with Syla. It's the only tax software built exclusively for Australian bitcoin investors, and it has an industry-leading tax integration for Amber
Using bitcoin tax software
Bitcoin tax software is designed to make doing your bitcoin taxes much simpler. The software will calculate all the tax outcomes for you, so you only need to import your transactions, make any edits as required, and download your final bitcoin tax report. All the complicated tax calculations are automatically done for you.
It’s really easy using Syla to do your bitcoin tax:
- Get started with a free account.
- Add Amber as a data source and import your transactions.
- Add any other platforms and wallets.
- Review your transactions.
- Download your Crypto Tax Report.
Syla does all the heavy lifting for you. Your transactions will be imported and the tax calculations will be done for you. When using LTFO tax optimisation you can even achieve lower tax outcomes than you normally would.
Once you've downloaded your bitcoin tax report from Syla, you can either give it to your tax agent, or you can use it to self-lodge your own tax return.
Importing transactions from Amber
The first step to getting your bitcoin tax sorted is to import your transactions from Amber.
Syla has an industry-leading tax integration with Amber. You can use the File Import in Syla.
Using a File Import is an effective way to import all your transactions on Amber as it’s safe and easy to do.
If you get stuck, we also have an Assisted File Import process.
Download your bitcoin tax report
Once you have all your transactions imported into Syla, you can view them, make edits if needed and import any other Data Sources that you have.
After you’re happy with everything, you can download your Crypto Tax Report.
ATO bitcoin tax report
Tax software for Amber
It's very difficult to correctly calculate all the tax outcomes of your bitcoin by hand unless you're a tax accountant.
If you are using a tax accountant, then you probably don’t want them doing it by hand either, as it's going to take a long time and cost a lot.
That’s where using bitcoin tax software can save you a lot of time and money, that you'd rather spend doing something else. 😊
Syla is the only bitcoin tax software designed specifically and only for Australia. Syla not only calculates all your tax outcomes to ensure you are ATO compliant, but it also optimises your tax to ensure you pay the lowest bitcoin tax legally possible, saving you both time and money.
- Best value - $59 AUD for 10,000 transactions.
- Absolute certainty - purpose-built for Australian tax law.
- Maximise your tax savings - using Syla's proprietary LTFO method.
👉 Get started for free.