The Australian Taxation Office (ATO) is reported to be channeling its attention on taxes owed by cryptocurrency investors this year, according to Cointelegraph.
The Australian Taxation Office is an Australian government statutory agency and the principal revenue collection body for the Australian government.
The ATO will be enforcing its tax requirements this year by using 100 point checks, a security checking system long favored by the Australian government and other sectors, and also call on bilateral agreements with other countries to identify users for tax payment purposes. There are currently over 40 countries who have such agreements with Australia including the US and the UK.
The Tax Office have been described by Liz Russell, a senior tax agent at Etax.com.eu as being on the “warpath” with these new announcements designed to bring Australia’s crypto users in the mainstream taxation orbit in the country, suggesting the ATO will be “doubling down with its data-matching technology to ensure that Australians are paying any taxes owed through cryptocurrency trading.”
Until recently Australia employed an unpopular double taxation system. Regulation of cryptocurrency has been an issue over the past few years. The Australian government now maintains that transacting with Bitcoin is similar to a barter, being neither money nor foreign currency and as such, is not a financial supply for goods and services purposes. The unpopular tax on Bitcoin purchases will now be lifted in July of this year and Australians will no longer have to pay goods and services tax (GST) on cryptocurrency purchases.
Russell suggests that due to recent losses, possibly made through the Bitcoin downturn, investors can balance-sheet gains against losses deducting losses from profits made late in December of 2017 when bitcoin reached its high point. Gains also in include regular profit from non-crypto sources such as property and investments.
The ATO is on the alert regarding the movement of cryptocurrency particularly following a recent scam where fake ATO employees attempted to collect crypto tax payments posing as collectors.
Mark Chapman, director of tax communications H&R Block Australia, confirmed the crypto tax crackdown:
“The ATO is really looking at that [cryptocurrencies] as a big risk area because it’s new and people don’t understand the tax implications.”
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