CoinJar Tax Guide

CoinJar Exchange is an award-winning, venture capital-backed and the longest-running digital currency exchange in Australia. Founded in 2013 by Asher Tan and Ryan Zhou, and currently headquartered in Melbourne, CoinJar has since placed digital currency into the hands of countless people. With strong values surrounding continuous improvement and having empathy, CoinJar aims to build financial experiences that address real-world problems.

For your Everyday user:

• The easiest way to buy, sell, store and spend digital currency with CoinJar’s digital currency account
• An innovative digital currency debit card, CoinJar Swipe, that allows you to spend digital currency anywhere that accepts EFTPOS in Australia, make cash withdrawals at any ATM/cash-out facility and earn rewards as you spend

For traders:

• CoinJar Exchange with features ranging from powerful data insights to multiple markets access for over 25 digital currency pairs
• Simplest way to make off-exchange, over the counter (OTC) trades of \$50,000 AUD and above with CoinJar OTC Trading desk

For institutions:

• Infrastructure, funding capabilities and account management tailored for institutions and businesses
• Trade with great liquidity opportunities through 3 daily auction windows

• Multi-layered security strategies including transport Layer Security, data encryption and periodic security audits to best protect customer assets and information
• For account security, advanced machine learning techniques are used to recognise suspicious logins, account takeovers and financial fraud
• Promotes Two-Factor-Authentication (2FA) and is registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC)
• At least 90% of customer assets are stored offline in secure, geographically redundant locations and protected by multi-sig technology when stored online

Investing in cryptocurrency incurs different tax liabilities and these might be in the form of Capital Gains Tax (CGT) or Income Tax. However, the type of tax payable and the quantity will depend on the specific features of the transaction such as the type of transaction made, as well as the entity making the transaction (i.e. business vs. individual).

Capital Gains Tax refers to the tax paid on a capital gain made from the sale of a capital asset. Specifically, capital gain (or loss) = capital proceeds (price that the capital asset was disposed of for) – cost base (price it was purchased for).

Therefore, different transactions involving the disposal of cryptocurrency may give rise to a ‘Capital Gains Tax Event’ and result in some CGT payable to the ATO. Once taxable quantity is determined, the tax payable will be calculated according to your individual income tax bracket.

You can read more about how crypto taxes are calculated in our Crypto Tax Guide.

Whether you are a business, investor or personal user of cryptocurrency, remember that crypto gains or losses are taxed. Therefore, to accurately calculate your tax liability – it is important to maintain records of all your cryptocurrency exchanges.

Records may be requested at the discretion of the ATO and generally need to be held for a period of 5 years after the cryptocurrency exchange.

As stated on the ATO wesbite as of 9th July 2020

You need to keep the following records in relation to your cryptocurrency transactions:

• the date of the transactions
• the value of the cryptocurrency in Australian dollars at the time of the transaction (which can be taken from a > reputable online exchange)
• what the transaction was for and who the other party was (even if it’s just their cryptocurrency address).

The sorts of records you should keep include:

• receipts of purchase or transfer of cryptocurrency
• exchange records
• records of agent, accountant and legal costs
• digital wallet records and keys
• software costs related to managing your tax affairs

Keeping good records will make it easier to calculate and meet your tax obligations, and if you are in business, they will assist you to manage your cash flow and see how your business is doing.

You can use an accountant or third-party software to help meet your record-keeping obligations and working out your tax.

As you can see there is a lot of record keeping requirements, and this can be painful to manage. For example, if you traded Bitcoin for Ethereum you are required to record both sides of the transaction back to Australian dollars, and declare any applicable taxes. If you were to do this manually it can literally take days, but luckily CryptoTaxCalculator is here to help automate this for you.

CSV

1. Login to Coinjar
2. Navigate to Tax Settings
3. Download the 'Purchase and Sales Report' CSV
   
4. You can also download the 'Deposits and Withdrawals' CSV
5. Sign up to CryptoTaxCalculator
6. In the dropdown menu search for CoinJar
7. Click the browse button and select the csv file downloaded from Coinjar
8. Click the upload button
9. You can also append the 'Deposits and Withdrawals' CSV (optional)
10. Navigate to the review transactions tab and verify you can see all your crypto transactions
11. Navigate to the generate report tab and select the financial year you want the report for.
12. Download the report and send to your accountant.

API

1. Sign up to CryptoTaxCalculator
2. In the dropdown menu search for CoinJar
3. Select the API option
4. Click connect to CoinJar to be redirected to the CoinJar signup page
5. We will ask permission for 'Deposit and Withdrawals' and 'Purchase And Sales' reports
6. Click 'Authorise'
   
7. We will then sync your transactions directly on CoinJar directly with CryptoTaxCalculator
8. Navigate to the review transactions tab and verify you can see all your crypto transactions
9. Navigate to the generate report tab and select the financial year you want the report for.
10. Download the report and send to your accountant.

CoinJar Exchange

1. Log in to CoinJar and navigate to the exchange page
2. Click the account menu in the top right corner and navigate to API Keys
3. Click create new key and make sure you select read only
   
4. Double check you have selected read only and click 'Creat Key'
5. Copy the secret
6. Sign up to CryptoTaxCalculator
7. In the dropwdown menu search for CoinJar Exchange
8. Select the API option
9. Paste the secret and click okay
10. You can now generate tax reports to send to your accountant.