For some time now, the ATO’s data matching arm has been collecting bulk records from Australian cryptocurrency designated service providers. It follows a growth in Australian taxpayer participation with bitcoin and other cryptocurrency assets over recent years, with estimations from the ATO that between 500,000 to one million local taxpayers (including SMSFs) have invested in crypto assets.
ATO Deputy Commissioner Will Day announced that it will be working with other regulators, particularly AUSTRAC and ASIC, to make sure tax laws are adhered to within a whole-of-system approach. “The ATO is also working in a joint international effort as part of the Joint Chiefs of Global Tax Enforcement” (also known as J5) “aimed at investigating cryptocurrency-related tax evasion and money laundering,” he said.
According to a report from US-based blockchain and crypto news site BitcoinerX, the ATO expects a three-fold return on an estimated $1 billion spend on chasing what it calls “crypto tax”.
“To track down tax evaders, the ATO is working with cryptocurrency exchanges in Australia as well as global exchanges. The agency will analyze the user data gained from the exchanges and tax returns to see if the numbers add up,” the report says. “Cryptocurrency is taxed as a capital asset in Australia, which means any profit gained from selling bitcoin or other cryptocurrencies is taxable. Losses can be applied to offset any capital gains.” Readmore
