Reuters got a notification from last month that revealed a larger effort to find individuals who may have avoided tax requirements on their cryptocurrency trading; this effort is a part of that notice.
The worldwide trend towards stricter oversight of digital assets is mirrored in Australia’s tax authorities’ increased attempts to tackle tax compliance among cryptocurrency users.
The ATO is requesting extensive personal and transactional data from as many as 1.2 million crypto exchange customers in Australia.
Reuters got a notification from last month that revealed a larger effort to find individuals who may have avoided tax requirements on their cryptocurrency trading; this effort is a part of that notice.
Users’ social media accounts, phone numbers, and financial details like wallet addresses, currency types exchanged, and linked bank account information are all part of the data request that the ATO has made. The data request also contains basic identifying information like users’ birth dates.
According to the notification, cryptocurrency is treated as a taxable asset in Australia, even though it differs from typical foreign currencies.
Capital gains tax applies to the profit made from selling cryptocurrencies because of this categorisation. Values of key cryptocurrencies have risen substantially, highlighting the fact that this ATO action occurs at the same time as big gains in the cryptocurrency markets.
For example, since the beginning of the year, the value of Bitcoin has increased by 44% and that of Ether by 32%.
According to TradingView, the market capitalization of other notable cryptocurrencies has increased by more than 27%, excluding Bitcoin and Ether.
The Australian Taxation Office has issued a warning about the likelihood of tax avoidance via the use of cryptocurrency, specifically the purchase of crypto assets under fictitious names.
This isn’t only an Australian problem; comparable regulatory measures are happening all across the world. For instance, Sahil Behal, director general of the compliance section at the Canada Revenue Agency, has revealed that in an effort to recoup overdue taxes, the agency is examining a large number of crypto investors and doing more than 400 audits pertaining to crypto.
The finding of about $39.5 million in unpaid taxes from the fiscal year 2023–2024 is the basis for this action.
As a result of Turkey’s prominent role in the cryptocurrency market, the nation is planning to pass laws later this year that would provide a regulatory framework for taxing cryptocurrencies.
American lawmakers are considering raising the top rate of long-term capital gains tax to 44.6% from current levels, with a possible additional 25% tax on unrealized profits for the ultra-wealthy.
Crypto Tax Made Easy CEO Matthew Walrath claims that most individuals would be unaffected by these strict ideas, calling them “a big, fat nothing burger” since they are still in the proposal stage.
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