As the ATO data matching program ramps up, Australians who have invested in cryptocurrency will no longer be able to conceal their transactions from the ATO to avoid paying tax.
The Australian Taxation Office has extended its cryptocurrency data-match program for another three years. The data collected by the Tax Office will be used to identify the individuals who sold or bought crypto assets. It is expected to collect records about 400,000 to 600,000 individuals annually.
The data items that the ATO collects will include identification details of individuals. These details include their names, addresses, and phone numbers.
This data matching program will uncover those individuals who failed to report a cryptocurrency transaction on their income tax return.
Data collected under the program will be held for seven years to enable the ATO to go through past transactions and cross-reference the taxpayer records.
Bitcoin, amongst many other cryptocurrencies out there, has become an integral part of the global economy, with its value hitting an all-time high of over $80,000 in April.
The Australian Taxation Office has extended its program to match tax returns with digital assets. Notices will be sent out to around 100,000 taxpayers ahead of time to make them aware of their tax obligations.
The ATO has warned that the belief of the anonymity of cryptocurrencies has led to many people assuming their investments are untraceable. While it appears that cryptocurrencies are an anonymous form of payment, the government is closely monitoring how they interact with the real world.
The ATO’s light approach to crypto was always unlikely to continue as an ongoing practice. The Tax Office has been gathering data on cryptocurrency exchanges in order to better understand the market. They will start to take a firmer line once the data comes in therefore taxpayers are urged to pay attention on being tax compliant.
If you need assistance in meeting your tax obligations with your cryptocurrency assets, please do not hesitate to contact our office.