Hundreds of thousands of Australian crypto investors are set to receive a reminder from the country’s authorities of their tax obligations in the coming weeks. Referred to as an unnamed representative of the Australian Tax Office (ATO), news.com.au reported on the upcoming March 11 campaign.
Australians Buying or Selling Cryptocurrencies
ATO had published its guidance framework on cryptocurrencies taxation in 2019, defining Bitcoin (BTC) and other crypto-assets as taxable forms of property.
The office also published a Data Matching Protocol for cryptocurrency, which it uses to obtain transaction data from cryptocurrency exchanges on all taxpayers who have bought and sold cryptocurrency, explained the ATO representative, adding:
“Using this data we’ve found that due to the complex nature of cryptocurrencies, some people may not be aware that there may be tax obligations, so our campaign is designed to help raise awareness and give people the opportunity to fix any mistakes.”
ATO expects to contact “as many as 350,000 individuals who have traded in cryptocurrency in the last few years” in the coming two months.
As such, all those known to hold cryptocurrency will be reportedly written by the office by email or letter, regardless of whether or not they sold or traded them in the past financial year. These communications will aim to “remind them of their tax obligations and the records that they should keep.”
Furthermore, ATO could contact taxpayers found to have sold crypto during the 2017–18 financial year with the request that they review their return and ensure that they have reported the correct capital gains on all trading activities.
Marc Chapman, director of tax communications at the American multinational tax preparation firm H&R Block, told reporters that since last year ATO has been investigating the reporting of “in the background” discrepancies in tax returns.
Some of his clients, he noted, had been given an opportunity to correct themselves where discrepancies were discovered.
He claimed that up to a million people in Australia had some form of dealings with crypto-trading in the ATO estimates, implying that the campaign of the office will be quite extensive in scope.
Although some traders may have dabbled in crypto without being aware of the tax implications, Chapman added that others would:
“May well have known the tax implications, but assumed the ATO would never find out because it is all done online and it is not in Aussie dollars – it is very much a virtual transaction, so some people out there have assumed the ATO couldn’t follow the money, which is obviously not correct. The ATO gets information directly from these cryptocurrency exchanges.”