The Australian Taxation Office (ATO) is contacting up to 350,000 individuals to ‘remind’ them of their obligation to report crypto gains. At this stage the campaign is designed to “raise awareness and give people the opportunity to fix any mistakes.
Data Matching Program Used to Identify Crypto Traders
As Bitcoinist reported, the ATO launched a data matching program last year in order to identify Australian citizens who had invested in crypto. Under the program the ATO obtains data from crypto exchanges and other sources in order to match transactions to taxpayers.
Using this information, it is now contacting these individuals in order to remind them of their obligation to report such transactions. Even those who sold crypto back during the 2017/2018 financial year are being targeted and asked to review their returns.
Those who wish to ‘self-correct’ their returns are given a month to do so without penalty. However, failure to do this will lead to a formal audit process, and could mean additional charges and interest being added to any tax liability owed.
Lack Of Awareness
Cryptocurrency is classed as property in Australia, and hence any profits (or losses) made through buying and selling it are subject to capital gains tax. An ATO spokesman recommended keeping good records of any crypto trading to make it easier to declare in tax forms.
It is assumed that many of those receiving communications will simply have ‘dabbled’ in crypto and not appreciated the tax implications. However, some will have assumed that their trades were untraceable by the ATO, and this communication is intended to remind them to do the right thing.
Australia’s targeting of crypto investors is a perfectly reasonable response. After all, why should they get away without paying capital gains on their assets, while those who invest in shares and other assets do not?
However, recent reports suggest that Australian banks have been demanding invoices and detailed explanations of how money will be spent before allowing withdrawals. Perhaps the threat of audit is intended to dissuade those who do not wish to live in a nanny state, and wish to regain their own financial sovereignty through use of crypto?
But surely it is better to pay tax on your profits, than have to beg the bank to give you your own money for a new tv. If only the tax authorities spend as much time and effort pursuing large corporations for tax as they do going after individuals.
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