Australia: Adopted Taxation Office guidance on the tax treatment of decentralized finance and wrapping

On 9 November 2023, the Australian Taxation Office issued guidance on the tax treatment of decentralized finance and wrapping. The guidance states that engaging in wrapping or unwrapping tokens, such as converting one crypto asset into another form, constitutes a capital tax event, which triggers tax implications. The guidance was issued following the Tax Office declaration specifying that DeFi lending and borrowing, contributing to liquidity pools and earning from DeFi platforms are all subject to income taxes.