Cryptocurrency taxation has is one of the new terminologies that investors and traders are grumbling to understand in the modern world. Businesses that as cryptocurrency exchanges are also required to file taxes to the government lest they are heavily fined.
ATO Collects Documents from Cryptocurrency Exchanges in Australia
Australian cryptocurrency investors who have invested in digital currencies could soon get an official letter from the Australian Taxation Office to file taxes. The decision by ATO was made to help the government benefit from the ballooning cryptocurrency industry in the country through taxes.
Reports indicate that ATO has already started collecting records from various cryptocurrency exchange platforms that operate in the country. The financial regulator has also stated that data submission should be an ongoing process and should include specific information such as sale and purchase of various digital currencies.
According to the Australian government, all cryptocurrencies are assets and so they are subject to capital gains tax. In a bid to improve data collection, Australian Taxation Office has contracted a third-party data company to help taxpayers in the country meet their tax obligations through various processes such as tax returns and pre-filling. The agency has also stated that the data will be collected under notice from the exchange platforms on an ongoing basis to ensure transparency and adherence to tax regulations and rules.
In a recent interview, Mr Day from ATO stated that the agency has already started to acquire and process data sets of customer transactions and details from 2014-2015 financial year to date. The data matching program protocol will ensure that all the information required to calculate taxes is collected from the exchange platforms.
When asked about the specific cryptocurrency exchanges that they were narrowing down on, ATO stated that revealing the names would put them at a commercial disadvantage. The agency also stated that they would continue to improve their processes to increase the number of exchanges that they collect information from.
Coinjar, Coinspot, and Independent Reserve are some of the largest cryptocurrency exchanges in Australia. Recent report indicates that between 500,000 and 1 million Australians have invested in both blockchain technology and cryptocurrencies. Most of the investors have multiple accounts across different exchange platforms and ATO is committed to understanding the impact that has on individual tax requirements.
Australian Taxation Office can only achieve this much if they worked on this alone. The agency admins are aware of this and have reached out to other financial regulators in the country such as Australian Securities and Investments Commission and Australian Transaction Reports and Analysis Center. The main objective of the collaboration is to make sure that tax law requirements resonate with the entire system approach.
Australian Taxation Office is focused on imposing cryptocurrency taxes on investors and traders in the country. This is a positive move that will ensure that the government also benefits from this lucrative and dynamic industry. Read more cryptocurrency news here.