Australia Seeks Crypto Tax Records on 1.2M Users

The Australian Taxation Office (ATO) has embarked on a massive investigation, seeking cryptocurrency exchange users’ personal information and transaction records over possible tax evasion.

Reuters says this investigation will affect an estimated 1.2 million cryptocurrency users. Initially issued in April, the notice is in response to the growing adoption of cryptocurrency and concerns about potential tax evasion.

Targeting Australian Crypto Users

The tax watchdog’s alert underscores the appeal of crypto assets for individuals looking to avoid paying taxes, mainly because they are easy to obtain with false information. Although the specific exchanges targeted by Australian regulators remain unknown, the directive includes a wide range of personal information, including but not limited to birth dates, phone numbers, and social media profiles.

The measures taken by the Australian tax body highlight its approach to addressing potential tax evasion in the country and preventing money laundering schemes.

Expanded Crypto Tax Scrutiny

Furthermore, the ATO has expanded its scrutiny of cryptocurrency transactions. Henceforth, it thoroughly examines transaction details such as bank account numbers, wallet addresses, and token types.

In contrast to treating cryptocurrencies as foreign currency, Australia classifies them as assets. It imposes capital gains tax obligations on investors who realize profits from selling or exchanging their tokens. However, the applicable tax rate depends on the size of the capital gains.

One notable provision is a 50% discount on income from the sale of cryptocurrencies held for over 12 months. This increased scrutiny is part of the outcome of a strategic collaboration signed by Indonesian and Australian tax officials in Jakarta a few weeks ago.

The bilateral agreement aims to facilitate the exchange of cryptocurrency-related information to improve the identification of taxable assets in both jurisdictions. Australia is also leading efforts to develop a comprehensive Crypto-Asset Reporting Framework (CARF) in collaboration with other countries.

CARF’s primary goal is to create standard guidelines for automatically exchanging information about cryptocurrency transactions to promote a uniform approach to crypto taxation worldwide.