The Australian Tax Office (ATO) is remodeling its crypto tax program to oversee cryptocurrency taxation and effectively catch defaulters. The agency has been collecting details of crypto transactions for the past ten years, placing tax evaders who fail to file their tax data properly at risk of getting caught.
The move underscores the heightened tax scrutiny ahead for cryptocurrency entrepreneurs and firms in Australia.
The Australian Tax Office Updates Crypto Tax Matching Program
Adam Saville-Brown, the general manager of Koinly, a crypto tax reporting platform, revealed this information during an exclusive correspondence with Cointelegraph. He disclosed that the ATO is monitoring reports from crypto gainers ahead of Australia’s financial year end on June 30.
Taxpayers, including crypto income earners, will start lodging their tax returns before the end of June.
If you’ve sold or disposed of your investments, we’ve got handy info for tax time 👉 https://t.co/yCeqxbssyh pic.twitter.com/qChG7XdHFo
— ato.gov.au (@ato_gov_au) June 25, 2024
The ATO updated its crypto data match program in a move to enhance its crypto tax data collection. The revamp will give the agency access to crypto transaction data from 2014 to 2026.
As part of its revamped program, the ATO mandated that Australian crypto exchanges submit information on about 1.2 million crypto investors yearly. These investors’ data include names, dates of birth, emails, home addresses, phone numbers, and social media accounts.
Other information includes IP addresses and crypto transaction details, such as the type of crypto asset trades, wallet addresses, and bank data.
Notably, the ATO closely watched crypto transaction data to ensure proper taxation details. It expects all crypto exchanges legally operating in the country to lodge tax returns on crypto income.
Michelle Legge threw more light on the activities of the ATO in crypto data collation. She stated that the ATO always has access to crypto transaction data regardless of the crypto exchange platform, whether Coinbase, Binance, CoinSpot, or others.
According to Saville-Brown, the ATO’s program “will likely catch out the few remaining investors that fail to comply” with the tax reporting rules.
Also, the program doesn’t exclude investors who gave wrong reports about their crypto gains. At a minimal level, the ATO will issue them letters demanding accurate reporting of their crypto transactions.
Australia Places Bitcoin ETFs on Tax Bill
Australian taxation laws also apply to the spot Bitcoin ETFs in the country. Notably, two spot BTC ETFs emerged in Australia this June. VanEck Bitcoin ETF launched on the Australian Securities Exchange on Thursday, June 20, with about A$990,000 in assets.
However, the other ETF, the Monochrome Bitcoin ETF (IBTC), holds Bitcoin directly. IBTC started trading on Tuesday, June 4, on the Cboe Australia exchange.
According to the ATO, investors of any spot Bitcoin ETF will pay tax on capital gains on the products.
Legge confirmed the extension of the tax matching program on the ETFs. While Legge described the introduction of spot BTC ETFs in Australia as good news, she noted that it would attract a tax bill.
Meanwhile, the ATO’s revamped program aims to ensure transparency and fairness in the taxing system. Moreover, it serves as a wake-up call to every crypto investor in Australia who plays fast-and-loose or completely evades tax reporting.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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