Income tax – wrapping, bridging, lending, borrowing and staking cryptoassets

Cryptoassets are increasingly being used in a variety of peer-to-peer transactions on the blockchain without the involvement of a central party. These transactions are known as decentralised finance (DeFi) transactions.

This issues paper sets out the Commissioner’s initial views on the income tax consequences arising from common DeFi transactions such as wrapping, bridging, lending, borrowing and staking. The main issue that arises is whether these activities involve disposals of cryptoassets and acquisitions of different cryptoassets for tax purposes.

If you would like a copy of this in Word, contact us using the Feedback button below.