In the next couple of weeks, the Australian Taxation Office (ATO) plans to contact hundreds of thousands of Australian cryptocurrency investors. This way, Australian authorities want to remind crypto investors about their obligations.
As a reminder, in 2019 Australian Taxation Office published its guidance on the taxation on cryptocurrencies. As a result, Bitcoin and other crypto-assets fell under the category of taxable forms of property.
Moreover, the office published a Data Matching Protocol for cryptocurrency. Tax Office is using this protocol to obtain transaction data from crypto exchanges on who have bought or sold cryptocurrency.
ATO found that due to the complex nature of cryptocurrencies, some people may not be aware that there may be tax obligations. However, authorities plan to improve the situation thanks to their campaign.
Cryptocurrency and taxes
One of the best ways to raise awareness and to fix any mistakes is to contact crypto investors. Australian Taxation Office expects to contact as many as 350,000 individuals who have traded cryptocurrency in the last several years.
Taxation Office plans to use various methods to contact people. For example, the Australian Taxation Office will send an email or letter to all those people who own cryptocurrency. Moreover, they will contract crypto owners regardless of whether or not they have sold or traded over the past financial year.
Australian Taxation Office may send emails or letters to taxpayers who sold crypto during the 2017-2018 financial year.
According to Marc Chapman, director of tax communications at multinational tax preparation firm H&R Block, up to one million people have had some dealings with crypto trading.
In 2019, ATO coordinated its cross-border investigations with the J5.
Last but not least, the J5 is an international taskforce of tax enforcement authorities from five countries. Australia, Canada, the Netherlands, the United Kingdom, and the United States.