The Australian Tax Office (ATO) issued a statement reminding the country’s 600,000 cryptocurrency users to pay taxes on their gains in the coming tax year.
After discovering a large spike in investments from 2020, the Australian government has launched a crackdown on crypto dealers and crypto activity.
The government has made it plain that cryptocurrency’s anonymous methods will not shield or excuse Australian crypto traders from paying taxes.
Financial regulators will trace these dealers through their bank accounts, according to Assistant Commissioner Tim Loh:
“We are alarmed some taxpayers think the anonymity of cryptocurrencies provides a license to ignore their tax obligations. While it appears cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions, and cryptocurrency online exchanges to follow the money back to the taxpayer.”
The ATO will extrapolate data from bank accounts based on prior tax filings. This will ensure that traders pay the correct amount of tax. Crypto assets will be taxed as income depending on the value of their cryptocurrency in Australian dollars.
Over 100,000 bitcoin owners will be contacted directly by the IRS, and over 300,000 others will be reminded to disclose their financial gains or losses on their 2021 tax returns.
For Australian financial authorities, 2021 has been a busy year as they try to develop terms and conditions for the ever-changing world of cryptocurrency. The Select Committee on Australia as a Technology and Financial Centre of the Australian Senate said in May that it would investigate how crypto assets could be regulated in the country.
To strengthen the local fintech sector while fostering financial innovation, a parliamentary study is looking into crypto regulation.
As bitcoin grows in popularity throughout the country, regulators believe it is an appropriate step. According to reports, some of the country’s wealthiest families are investing in digital assets. This is an alternate investment to stocks and bonds to generate returns.