- The Australian Taxation Office (ATO) is currently investigating an estimated 1.2 million cryptocurrency-related accounts for potential tax discrepancies.
- The aim of this exercise is to uncover unreported transactions involving crypto assets, as the Australian tax regime treats cryptocurrencies as assets, not as foreign currency.
- A recent treasury report reveals a significant increase in crypto asset transactions in Australia, with a notable spike of 63% in 2021.
The ATO is scrutinizing an estimated 1.2 million crypto-related accounts for potential tax discrepancies, aiming to uncover unreported transactions and ensure proper tax reporting in the growing crypto market.
ATO’s Investigation into Crypto-Related Accounts
The Australian Taxation Office (ATO) is currently investigating an estimated 1.2 million cryptocurrency-related accounts for potential tax discrepancies. This action comes amid increasing crypto awareness in the country, prompting the Australian authorities to examine personal data and transaction details from crypto exchanges.
Uncovering Unreported Transactions
With this exercise, the ATO aims to uncover unreported transactions involving crypto assets, either as currency exchange or those involving goods and services. Despite the complexity of the crypto industry and how crypto transactions vary from other mainstream financial processes, the ATO aims to regulate and educate crypto users on their fiscal duties. However, the regulator highlighted that some crypto users may deliberately try to avoid tax obligations by using false information to execute crypto transactions.
Cryptocurrencies as Assets, Not Foreign Currency
It’s important to note that the tax regime in Australia treats cryptocurrencies as assets, not as foreign currency. By this classification, crypto investors are obligated to pay capital gains tax on profits made from selling crypto assets. With the ongoing scrutiny, the ATO noted that it is reinforcing its efforts to ensure all taxable activities are transparent and properly reported.
Growing Popularity of Crypto Assets in Australia
A recent treasury report reveals that crypto assets are growing in popularity on the shores of Australia. The department reported that over 800,000 taxpayers transacted in crypto assets over the past three years, with a notable spike of 63% in 2021. Data from Statista, the online platform for data gathering and visualization, revealed that crypto revenue in Australia is expected to grow by 10.15% annually. It also showed that the revenue will reach a projected total of $1.6 billion by 2028.
Conclusion
The ATO’s current investigation into crypto-related accounts underscores the growing importance of the crypto market in Australia. As the popularity of crypto assets continues to rise, it’s crucial for investors and users to understand their tax obligations. With the ATO’s efforts to ensure transparency and proper reporting, the Australian crypto market is set to become more regulated and secure.
