The Australian Taxation Office recommends taxing DeFi transactions, but does not clarify whether it will apply to liquidity staking and L2 bridging o

According to the new guidelines released by the Australian Taxation Office (ATO) on November 9th, capital gains tax (CGT) should be levied on a range of DeFi transactions. The new guidelines state that capital gains tax must be paid when a user transfers tokens to an address or smart contract that does not have "beneficial ownership" or if the token balance of that address is non-zero. Although these standards suggest that the relevant rules may cover liquidity collateral, the guidelines do not clarify some confusing issues, such as whether Australian DeFi users need to pay taxes when staking Ethereum on Lido or sending tokens across L2. In cases where the rules are not clear, assuming an Australian DeFi user purchases ETH for $100 and then stakes it or sends it through bridging at a price of $1,000, they may need to pay taxes on the $900 "profit", even if they have not sold ETH or realized profits. An ATO spokesperson stated that the tax situation of the transaction will depend on the steps taken by the user on the platform or contract, as well as the relevant facts and circumstances of taxpayers who own cryptocurrency assets. Liberal Party Senator Andrew Bragg stated that the previous government had commissioned the Taxation Committee to propose appropriate rules for taxing cryptocurrencies, but the investigation results have been postponed twice and will not be released until February next year. In the absence of legislation, the Australian Taxation Office is allowed to formulate its own rules. (Cointelegraph)