Australian Tax Office (ATO) has been working with a double focus to contain cryptocurrency market growth as a mechanism of tax evasion. Approximately, 2 million accounts are under investigation, and the ATO works to trace down those who haven’t reported their crypto transactions accurately.
As per the notice, the ATO approached crypto exchanges and demanded account holders’ information and records of transactions. The data can range from date of birth, phone numbers, and social media accounts to sensitive things like bank accounts, wallet addresses, and coin types traded.
The digital currencies in Australia are regarded as taxable assets in the country and not as foreign currency input. Consequently, holders of such assets or those trading cryptocurrencies need to pay the capital gains tax on any profits derived from selling them or exchanging them with other currencies. The ATO has communicated how crucial it is to follow the law when it comes to taxes, especially with the rapid technological development of digital assets.
These actions by the ATO are merely echoes of such actions that have previously been conducted by tax authorities all over the globe. In Canada the tax agency (CRA) cryptocurrency tax evasion became a high priority and $54 million have been collected from undeclared transactions.
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