What is Web 3.0 and How Does It Affect Australia’s Crypto Tax Guidance?

What is Web 3.0?

According to an Australian law firm, the recently released cryptocurrency taxation guidelines by the Australian Tax Office (ATO) should be disregarded due to its unclearness and regarded as “toilet paper”.

On November 9, the ATO issued guidance that could affect how investors and traders of Decentralized Finance (DeFi) file their taxes. Cadena Legal, in a blog post on November 27, noted that the guidance was “non-binding” instead of a binding public ruling, and thus should be seen as “toilet paper”.

The law firm further pointed out that there is a lot of confusion about what Australians can do with DeFi without triggering a Capital Gains Tax (CGT). Harrison Dell, the founder of Cadena Legal, commented to Cointelegraph that the issue could be solved with a public ruling.

What is ATO Guidance on Crypto Tax?

Dell, who was an auditor at the ATO between 2017 and 2019, is advising his clients to ignore the current rules for the time being. However, one crypto tax specialist warned that disregarding ATO guidelines could be risky, as an investor may still need to hire a lawyer if they breach the ATO’s guidance.

On Nov. 21, Cointelegraph attempted to find out from the ATO whether transferring funds via a bridge or staking Ether (ETH) on a liquid staking protocol such as Lido constituted a capital gains tax event, but the ATO didn’t give a direct answer.

Nevertheless, Dell believes that the two on-chain activities are more likely to trigger a CGT event than not, based on the few private rulings that he has overseen. This raises the question of what web 3.0, web 1.0 2.0 3.0, 3.0 web, what web 3.0, web 3.0 diagram, whats web 3.0, web 3.0 이란, diferencias entre web 2.0 y 3.0, and define web 3.0 mean for investors when it comes to ATO guidance.

What is Web 3.0?

“It is very difficult to say if this is correct or not, as the ATO did not give any useful explanations in their web guidance,” Dell said.

Dell suggested that the rules will remain unclear until a public ruling is issued or the government offers new regulations to fill the gaps left by the ATO.

“In reality, we will probably all have to wait until someone strategically litigates these matters,” Dell said. “Unfortunately, all of these solutions will take a long time.”

Web 3.0 Diagram

Understanding what Web 3.0 is can be quite confusing, as the ATO did not provide any useful information in their web guidance, according to Dell.

He believes that the rules will remain unclear until a public ruling is made or the government proposes new legislation to fill the gaps left by the ATO.

“I suspect we will all have to wait until someone strategically litigates these matters,” Dell said. “All of these solutions will take a long time, unfortunately.”