The Australian Tax Office (ATO) and AUSTRAC, country’s financial intelligence agency, is all geared up to scrutinize the crypto investors and track down the cryptocurrency tax evaders. This is in light of a new framework that is soon going to be in place.
ATO tracking Bitcoin tax evaders!
According to the reports, the Australian Tax Office (ATO) is going to track down the investors that are liable to pay taxes on their bitcoin investment. Currently, the tax office considers the cryptocurrency an asset instead of money. Moreover, they will use the identification and data-matching checks to pursue the cryptocurrency investors.
The Australian Tax Office will further employ anti-money laundering (AML) measures along with bilateral tax treaties to ensure transparency within the cryptocurrency market.
As per the National Tax Liaison Group Member, Paul Drum, it was a turning point for them. He further stated that:
“The effectiveness of the anonymity of Bitcoin and other cryptocurrencies is starting to fade. These coming changes mean that people shouldn’t assume they can hide forever behind blockchain technology, nor should they assume there are no tax consequences.”
He also commented on if bitcoin investments are exempt from the personal asset rules of capital gains:
“This is going to be a question asked time and again by cryptocurrency traders, and it will come down to the facts of each individual case.”
ATO to utilize AML, KYC & other measures…
The AML measures that are going to be released next month will provide the ATO with more probing powers. Furthermore, these measures will provide an oversight of crypto market while including 100 point identification checks that are compulsory for crypto traders.
According to deputy commissioner of ATO, Will Day, the tax office would focus on increased transparency to tackle the individuals who have cheated on their cryptocurrency taxes. This step follows the growing measures taken worldwide to put a stop to the bitcoin tax avoidance.
Apart from AML and KYC measures, exchanges will also have to reveal those transactions that seem to be suspicious. It also includes any cash transaction that exceeds 10,000 Australian dollars. These new measures will provide the Australian financial intelligence agency, AUSTRAC with extended jurisdiction.
ATO also mentioned that certain criteria do offer exemption:
“Where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.”
BTC market under global scrutiny for taxation …
Australia’s crackdown on bitcoin tax evasion came at a time when there is already increasing attention on the crypto market.
Just a few days ago, US Internal Revenue Service demanded the client records of one of the world’s biggest exchanges, Coinbase. Coinbase provided the IRS with the taxpayer ID, name, address and the transaction records of its 13,000 customers.
This increasing clampdown by global regulators had affected the bitcoin price and other cryptocurrency prices that slumped drastically, However, the market is again making its upward trend slowly and gradually with bitcoin price running at $11,336 at the moment.
What are your views on Australia striking those involved in bitcoin tax evasion? Do you think it is the right move on the regulators’ part? Let us know below!
I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.