- The ATO is scrutinizing an estimated 1.2 million crypto-related accounts for potential tax discrepancies.
- With the exercise, the ATO aims to uncover unreported transactions involving crypto assets.
- The Australian tax regime treats cryptocurrencies as assets, not as foreign currency.
The Australian Taxation Office (ATO) is scrutinizing an estimated 1.2 million crypto-related accounts for potential tax discrepancies. According to reports, this action comes amid increasing crypto awareness in the country, prompting the Australian authorities to examine personal data and transaction details from crypto exchanges.
With the exercise, the ATO aims to uncover unreported transactions involving crypto assets, either as currency exchange or those involving goods and services. Understandably, there is often a genuine lack of awareness about tax obligations when dealing with cryptocurrencies. That arises from the complexity of the crypto industry and how crypto transactions vary from other mainstream financial processes.
Considering the relative lack of awareness, the ATO aims to use the current exercise to regulate and educate crypto users on their fiscal duties. However, the regulator highlighted that some crypto users may deliberately try to avoid tax obligations by using false information to execute crypto transactions.
It is essential to note that the tax regime in Australia treats cryptocurrencies as assets, not as foreign currency. By this classification, crypto investors are obligated to pay capital gains tax on profits made from selling crypto assets. With the ongoing scrutiny, the ATO noted that it is reinforcing its efforts to ensure all taxable activities are transparent and properly reported.
A recent treasury report reveals that crypto assets are growing in popularity on the shores of Australia. The department reported that over 800,000 taxpayers transacted in crypto assets over the past three years, with a notable spike of 63% in 2021.
Data from Statista, the online platform for data gathering and visualization, revealed that crypto revenue in Australia is expected to grow by 10.15% annually. It also showed that the revenue will reach a projected total of $1.6 billion by 2028.
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