The Australian Taxation Authority will be paying special attention to the tax obligations for cryptocurrency investors, experts say
The ATO had said in early March that they would be using a combination of data matching and “100-point identification checks” to find crypto investors this tax season, as well as utilizing bilateral tax treaties and AML agreements to identify even more investors from the traditionally anonymous crypto sphere.
According to Liz Russell, a senior tax agent at Etax.com.eu, the ATO is on the “warpath” to make sure all crypto investors pay the correct amount owed in taxes, and will be “doubling down with its data-matching technology to ensure that Australians are paying any taxes owed through cryptocurrency trading.”
Since the ATO treats cryptocurrencies as assets -- having ended its system of double taxation for crypto last year -- gains made by selling cryptocurrencies in Australia are subject to capital gains tax provisions.
All tax returns in Australia cover the financial year from July 1 to June 30 and are due on Oct. 31 if individuals do their own taxes, the ATO website notes.
As Bitcoin (BTC) has jumped to $20,000 in December of last year, since then falling to around $6,554 by press time, crypto investors have had opportunities to both gain and lose money by crypto sales. Russell notes that this means that a loss from a crypto sale should be deducted from any gains made in the sale of other assets including crypto, shares, or investment properties.
The exception to the rule is if a crypto investor uses cryptocurrency to pay for items for personal use, like in what is soon to be the world’s first cryptocurrency airport in Brisbane.
News.com.au quotes Mark Chapman, director of tax communications H&R Block Australia, confirmed the crypto tax crackdown:
“The ATO is really looking at that [cryptocurrencies] as a big risk area, because it’s new and people don’t understand the tax implications.”
In mid-March, the ATO issued a warning about a new type of scam involving people pretending to work for the ATO in order to collect fraudulent tax payments through crypto for their personal gain. At the end of March, the ATO had also reached out to the public for advice on tax obligations for cryptocurrencies, citing the growing public interest as prompting the query.