The Australian Tax Office has targeted 1.2M crypto investors for tax compliance
The Australian Taxation Office wants information from 1.2M crypto users for tax compliance. Cryptocurrencies are classified as taxable assets in Australia and capital gains tax applies. A global crackdown on crypto tax evasion continues to intensify, particularly in Canada, Turkey and the US.
The Australian Taxation Office (ATO) is reportedly seeking information on up to 1.2 million cryptocurrency exchange users in a move to enforce tax compliance in the growing crypto market.
The initiative, detailed in an announcement by Reuters, highlights the ATO's efforts to identify individuals who have neglected their tax obligations in relation to crypto trading.
The ATO will go after tax evaders
The requested information includes various personal information such as users' birthdays, social media account details and phone numbers, transaction-related details such as wallet addresses, types of coins traded and bank account information.
This comprehensive approach aims to identify traders who fail to report their crypto-related income and pay the required capital gains tax on profits from cryptocurrency transactions.
Like other foreign currencies, cryptocurrencies are classified as taxable assets in Australia, requiring individuals involved in crypto trading to meet their tax obligations.
According to the ATO, the complex and dynamic nature of the cryptocurrency landscape often leads to challenges in understanding tax compliance. In the announcement, the agency mentioned that the ease of buying crypto-assets using fraudulent information could attract individuals who want to avoid their tax obligations.
Crypto tax compliance around the world
Australia is not alone in pursuing tax compliance in the crypto space. Around the world, jurisdictions are stepping up efforts to collect unpaid taxes stemming from digital asset profits. In Canada, the Canada Revenue Agency (CRA) is reportedly investigating more than 400 audits involving cryptocurrency investors to uncover unpaid taxes.
Likewise, Turkey is expected to introduce crypto-related legislation later this year to establish a legal framework for crypto taxes.
A regulatory proposal in the United States aims to increase long-term capital gains tax rates, particularly targeting high-income investors. The Biden administration's federal budget proposal includes a plan for a 44.6% tax rate on long-term capital gains for individuals earning more than $1 million. Additionally, there is a proposal for a 25% tax on ultra-high net worth individuals, although its implementation is uncertain.
While these regulatory measures signal a tightening of regulation in the cryptocurrency realm, it remains to be seen how much of an impact they will have on market volatility and investor behavior.
