Local news outfit The New Daily reported that according to Australian tax experts, the Australian Taxation Office (ATO) is set to begin cracking down on cryptocurrency investors this year.
In early March, the ATO said that they would start using a mix of data matching and 100-point identification checks to find crypto investors this tax season as well as utilize bilateral tax treaties and AML agreements to help identify more investors from the anonymous crypto sphere.
Liz Russel from Etax.com.eu says that the ATO is “warpath” to make sure all crypto investors pay the correct amount owed in taxes.
The ATO treats cryptocurrencies as assets, having ended double taxation for cryptocurrencies last year. Gains made by cryptocurrency trading in Australia, therefore, are now subject to capital gains tax laws.
Since Bitcoin has jumped prices from a high of $20,000 in December last year to around $6500 currently, investors have had several opportunities to both make money from or lose money by cryptocurrency trading. Russel investors must subtract the loss from crypto sales from gains made in sales of other assets.
The exception to this rule is if the investor uses cryptocurrency to pay for items for personal use.
Mark Chapman, director of tax communications H&R Block Australia, also confirmed the tax crackdown, saying that:
“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.”
Last March, the ATO warned about a scam involving people pretending to work for the ATO. The fraudsters tried to collect tax payments via crypto for personal gain. The ATO also reached out to the Australian public for advice on tax obligations for crypto, citing the growing public interest as prompting the question to the public.