Aussie crypto traders targeted by the Australian Tax Authority
The Australian tax authority is reportedly in the process of contacting over 350,000 Australians to remind them that they have to declare their cryptocurrency earnings on tax returns, or else they could face a tax audit (or worse).
The ATO wants to collect crypto tax
The Australian Taxation Office (ATO) has been collecting information from digital asset exchanges about Australian tax papers that have been trading crypto. The individuals whose data has been collected will receive “love letters” from the tax authority in the coming weeks to warn them that if they do not declare their cryptocurrency trading earnings, they may face an audit.
“In April last year, we published our Data Matching Protocol for cryptocurrency. Under this program we obtain cryptocurrency transaction data from currency exchanges on taxpayers who have bought and sold cryptocurrency,” an ATO spokesman told News.com.au.
Over 350,000 Australians will reportedly be hearing from the tax authority either via a letter or email, according to a report by News.com.au.
In Australia, cryptographic assets are classified as property and are, therefore, subject to capital gains tax. Any form of buying or selling of bitcoin (or other crypto assets), therefore, needs to be recorded and reported in your tax returns. While it may not make sense intuitively, this would also include purchasing a cappuccino at a café that accepts bitcoin as that would be considered exiting your bitcoin investment.
“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 be keeping,” the spokesman added.
Records should include all available transaction data such as time and date of each transaction, wallet records, transaction value in Australian dollars, and what the transaction was for.
Ensure you have been filing correctly
Taxpayers who have traded crypto during the 2017 crypto bull run that have already filed their taxes for that financial year, will also be contacted and asked to review their tax returns to ensure that they have reported their potential profits accordingly.
Whether you are an active crypto trader or a long-term HODLer in Australia, you would be advised to keep a record of your transactions - especially if you have made sizable crypto investments - to ensure that you can report your earnings as accurate as possible to your tax authority.
Should you find yourself in the situation of having received an email or a letter from the Australian Tax Office, you should reach out to your accountant or tax advisor to discuss exactly how you will need to proceed in filing your crypto investment earnings correctly.
OhNoCrypto
via https://www.ohnocrypto.com
Kieran Smith, Khareem Sudlow