Australian Tax Authorities Shed Light on Recent Crypto Investor Outreach

HashFlare

ComputerUniverse Введи промокод FW7FRUX при покупке и получи скидку 5 евро

This week, the Australian authorities launched a major campaign to prompt as many as 350,000 crypto investors to comply with their tax obligations.

In an interview with Cointelegraph on March 12, a spokesperson for the Australia Tax Office (ATO) said the campaign was designed to help raise awareness and give taxpayers “the opportunity to fix any mistakes” they may have made in reporting their capital gains on crypto trades.

Encouraging voluntary compliance

As of 2019, Bitcoin (BTC) and other crypto assets have been defined as taxable forms of property under the ATO’s guidance framework. 

In sending letters to as many as 350,000 individuals who have traded in crypto in recent years, the spokesperson said that ATO’s initial approach:

“Aims to promote voluntary compliance through identifying and educating those individuals who may be failing to meet their tax obligations simply because they are unaware of the tax consequences of trading in cryptocurrency.”

To identify crypto traders, the ATO uses a program known as the Data Matching Protocol for Cryptocurrency to obtain transaction data directly from currency exchangers.

ATO’s spokesperson said the office had collected and reviewed data from the 2014–15 to 2018–19 financial years and used it to analyze whether individuals had been reporting correctly:

“Taxpayers who are contacted by us should educate themselves on the tax consequences and correct any errors to avoid penalties. Where taxpayers are still making errors or failing to report their cryptocurrency transactions they can expect further follow up from us.”

In Australia, the spokesperson added, “many traders are failing to keep good records when they buy, sell, or trade cryptocurrencies, leading to errors or omissions on the tax return.” 

To keep in line with requirements, the ATO recommends that traders keep a detailed set of records, spanning receipts of purchase or transfer of cryptocurrency, exchange records, records of agent, accountant and legal costs; digital wallet records and keys; the date of the transactions; the value of the cryptocurrency in Australian dollars at the time of the transaction; what the transaction was for and who the other party was.

International cooperation

Beyond its domestic outreach, the ATP carries out joint operational activity with an alliance known as J5, or The Joint Chiefs of Global Tax Enforcement

Established to fight global tax evasion — including cryptocurrency threats and cybercrime — the J5 brings together tax experience, offshore, crypto and cyber expertise across Australia, Canada, the Netherlands, the United Kingdom and the United States.

The ATO declined to provide any specifics of the J5’s operational activity in relation to cryptocurrency.

Beyond its work at the J5, ATO also leads a Serious Financial Crime Taskforce, established in 2015 to prevent technology-enabled tax crime, offshore tax evasion and illegal phoenix activity . 

This latter refers to the creation of offshoot companies that continue the business of firms that had previously been deliberately liquidated to avoid paying their outstanding taxes, debts, employee and creditor entitlements. 

Administration, not policy

Earlier this month, Cointelegraph reported on a Select Committee hearing on FinTech and RegTech, at which Dr. Jemma Green, a fellow of Blockchain Australia, argued that current policy adversely impacts Australian initial coin offerings by classifying their proceeds as income, in line with legacy tax guidelines. 

In response to Dr. Green’s presentation, the ATO spokesperson said the agency’s role was to administer the country’s tax and super systems, and not to advise the government on policy.