The Australian Taxation Office says it cannot rely on records of cryptocurrency users
The Australian Taxation Office (ATO) says it cannot rely on crypto investors to track their crypto transactions and earnings — even though most investors are doing their best.
Speaking at the 14th International ATAX Conference on Tax Administration on November 23, ATO Commissioner Chris Jordan compressed That many new crypto investors may not fully understand Tax reporting obligations:
“In a rapidly growing sector with new investors, we cannot rely on taxpayers who know they need to keep and disclose records of their investment income and capital gains in their tax returns.”
“Our main concern is that many taxpayers believe that their crypto earnings are tax-deductible or only taxable when holdings are redeemed in Australian dollars,” he added.
Jordan explained that the ATO has been working on ways to “incentivize” people in the right direction such as pre-filling data for tax returns to get crypto users to report their investments.
The commissioner also said that the ATO has strengthened Trade data matching Capabilities in 2021 by capturing information from crypto demand side platforms (DSPs), stock registries and brokers.
“We have expanded our data matching protocols to get more data from third parties to help with emerging investments like cryptocurrency.”
“We’ve been working hard to improve the way we collect, manage, share and use data, but we’re still scratching the surface,” he added.
However, Jordan noted that “most people are doing the right thing” such as tax reporting compliance, or the “tax performance” of individuals and small businesses in Australia is high with “little or no interference” from ATOs of 94% and 87%, respectively.
The company that ATO may request in the future is Commonwealth Bank of Australia Partner partner.
On November 24, Chainalysis Country Director in Australia and New Zealand Todd Linfield Tell The Australian Financial Review said his company hopes to provide key expertise to Austrak and ATO.
“We want to have conversations with AUSTRAC about what they are looking to regulate and explain the lessons that can be learned from what the IRS is doing for the IRS. We can build on the experience we have in the space, and provide a local flavor.”
The company currently provides blockchain analysis services to the US Federal Bureau of Investigation and the Internal Revenue Service, and has also investigated Russia-based Suex OTC crypto businesses that targeted it. US Treasury in September regarding facilitating transactions for ransomware payments.