The Australian Taxation Office (ATO) is stepping its up its database in order to monitor if the correct taxation is being gathered from cryptocurrency holders across the country.
Part of the move will involve collecting information from Australian cryptocurrency designated service providers (DSPs) regarding crypto purchases and sales.
This follows on from a call for public information in 2018 when the ATO suggested it needed more input regarding its current legislation regarding cryptocurrency tax obligations and lifted the unpopular tax on Bitcoin purchases. This resulted in the tax on goods and services tax (GST) on cryptocurrency purchases being lifted in a bid to promote the growth of Australia’s fintech industry.
ATO Deputy Commissioner Will Day has said that this new extension on data gathering will make up a key element of the ATO’s compliance program, commenting:
“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. We also use third-party data to assist taxpayers in meeting their tax obligations through pre-filling of tax returns.”
The ATO added that with between 500,000 to 1 million Australians, the collection of taxes represents some element of risk particularly with “unexplained wealth and undeclared taxable capital gains,” a contributing factor.
The Tax Office says that it is committed to working with Australian Transaction Reports and Analysis Centre (Austrac) and the Australian Securities and Investment Commission (ASIC) in its collection of new data. Under new laws, exchanges are required to identify and verify the identities of their customers, similar to the same procedure followed by banks and other financial institutions.
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