Australian tax agency to send warnings to 350000+ crypto holders
|- The Australia Taxation Office is sending out a warning though mails and letters to crypto holders regarding accurate crypto tax reports.
- Since 2019, the tax agency has been conducting investigations into the irregularities in crypto tax.
As per a News.com.au report, the Australia Taxation Office (ATO) is planning to send out warnings to over 350,000 crypto traders in the country through emails and letters. ATO said that some Bitcoin traders could be unaware of their tax debts and the agency is willing to give digital currency taxpayers some time to figure the procedure.
Speaking to the news outlet, a spokesperson for the ATO said:
For other taxpayers where we can see they hold cryptocurrency, but may not have sold or traded any during the (financial) year, we will be writing to them to remind them of their tax obligations and the records they should keep. Over the next two months, we expect to contact as many as 350,000 individuals who have traded in cryptocurrency in the last few years.
The ATO classifies virtual currencies as property, meaning that they fall under capital gains tax. Bitcoin investors are responsible for accurate tax reporting as they are expected to maintain all transaction records. These records comprise transaction dates, parties involved in the transaction, the reasons for carrying out the transactions, etc.
The spokesperson also noted that the ATO would be sending reminders to Australian taxpayers involved in crypto trading between 2017 and 2018, asking them to check their returns to ensure proper reporting of capital gains on trading.
Mark Chapman, director of tax communications at US tax preparation company H&R Block, said that since 2019, the ATO has been conducting investigations into irregularities in tax. He also revealed that around a million people in Australia were trading digital currencies. While a few taxpayers got into the field unaware of the tax implications, a few others deliberately refused to report crypto transactions, he added.
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.
He highlighted that it’s not advisable for crypto holders and traders to avoid tax reporting, as auditing would be very expensive.
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