Tech
Australia Enhances Crypto Data Tax Program for Effective Control and Crackdown on Tax Evaders
The Australian Tax Office (ATO) is reshaping its cryptocurrency tax program to oversee the taxation of cryptocurrencies and effectively catch defaulting debtors. The agency has been gathering details about crypto transactions over the past decade, putting tax evaders who fail to properly file their tax data at risk of being caught.
The move underscores the growing tax scrutiny that cryptocurrency entrepreneurs and businesses will face in Australia.
Australian Tax Office Updates Cryptocurrency Tax Matching Program
Adam Saville-Brown, managing director of cryptocurrency tax reporting platform Koinly, revealed this information in an exclusive correspondence with Cointelegraph. He revealed that the ATO is monitoring crypto gainers’ reports ahead of the end of the Australian financial year, scheduled for June 30.
Taxpayers, including those earning income through cryptocurrency, will begin filing their tax returns before the end of June.
If you have sold or disposed of your investments, we have useful information for the tax return period 👉 Italian: https://t.co/yCeqxbssyh pic.twitter.com/qChG7XdHFo
— ato.gov.au (@ato_gov_au) June 25, 2024
The ATO has updated its crypto data matching program in a move to improve 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 has required Australian cryptocurrency exchanges to provide information on around 1.2 million cryptocurrency investors each year. These investors’ data includes 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 cryptocurrency exchanges, wallet addresses, and banking information.
In particular, the ATO has been looking closely at crypto transaction data to ensure adequate tax details. All cryptocurrency exchanges operating legally in the country are expected to file tax returns on income from cryptocurrencies.
Michelle Legge shed more light on the ATO’s activities in cryptographic data collection. You stated that the ATO always has access to crypto transaction data regardless of the crypto exchange platform, be it Coinbase, Binance, CoinSpot or others.
According to Saville-Brown, the ATO’s program is “likely to catch the few remaining investors who fail to comply” with tax reporting rules by surprise.
Additionally, the program does not exclude investors who have provided incorrect reports of their cryptocurrency earnings. At a minimum, the ATO will send them letters requesting accurate reporting of their cryptocurrency transactions.
Australia places Bitcoin ETFs on tax bill
Australian tax laws also apply to spot Bitcoin ETFs in the country. Notably, two BTC spot ETFs emerged in Australia this June. VanEck Bitcoin ETF launched on the Australian Securities Exchange on Thursday 20 June, with approximately A$990,000 in assets.
However, the other ETF, the Monochrome Bitcoin ETF (IBTC), holds Bitcoin Direct. IBTC began trading on Tuesday, June 4, on the Cboe Australia exchange.
According to the ATO, investors of any Spot Bitcoin ETF will pay capital gains taxes on the products.
Law confirmed the extension of the tax matching program on ETFs. While Legge described the introduction of BTC spot ETFs in Australia as good news, he noted that this would come with a tax impact.
Meanwhile, the ATO’s revamped program aims to bring transparency and fairness to the tax system. It also serves as a wake-up call for any cryptocurrency investor in Australia who is playing it fast and loose or completely avoiding tax filing.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile and high-risk asset class.
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