The ATO is continuing its crackdown on cryptocurrencies, launching a new data-matching program to flag down any crypto-savvy tax evaders.
The program will see the ATO collect bulk records from Australian cryptocurrency designated service providers (DSPs) to ensure cryptocurrency traders are paying the right amount of tax.
Previously, the ATO has issued warnings of “the tax consequences” that come with trading in crypto, stating that all users must keep records of their transactions.
Deputy Commissioner of the ATO, Will Day, said the latest scheme will catch out those doing the wrong thing.
“The ATO uses third party data to improve the integrity of the tax system by identifying taxpayers who fail to disclose their income details correctly,” Day said.
“We also use third-party data to assist taxpayers in meeting their tax obligations through pre-filling of tax returns.
“We want to help taxpayers to get it right and ensure they are paying the correct amount of tax.”
According to the ATO, there are between 500,000 to one million Australians that have invested in crypto.
Data will be collected to identify individuals or businesses that have engaged in cryptocurrency trading since July 1 2014.
The information being collected by the ATO may range anywhere from the status of the account, the wallet address associated with the account or the social media account of the user.
It is being labelled by the ATO as an exercise in promoting voluntary compliance, with Day confirming penalties may be significantly reduced in cases where the agency is voluntarily contacted prior to an audit.
The tools exist
So, if you’re into crypto and worried about the taxman, help is at hand.
KPMG Australia and cryptocurrency exchange Independent Reserve have launched the Crypto Tax Estimator.
“The Australian Tax Office has made it clear that anyone involved in acquiring or disposing of crypto assets needs to be aware of the tax consequences, this tool provides our customers for the first time with a simple way to view this information,” said Independent Reserve CEO, Adrian Przelozny.
The tool allows users to gauge an estimate of the potential tax exposure of their crypto assets and covers Bitcoin, Bitcoin Cash, Ethereum, Litecoin and XRP.