ATO’s New Cryptocurrency Data Matching [For Tax Compliance]

ATO receives cryptocurrency data

The ATO collects records from DSPs as part of the new data-matching program

The Australian Taxation Office (ATO) is collecting bulk records from Australian cryptocurrency designated service providers (DSPs) as part of a data matching program to ensure people trading in cryptocurrency are paying the right amount of tax.

Participation of crypto-assets has seen significant growth in recent years. It is estimated that 500,000 to one million Australians have invested in crypto-assets.

Data-matching program purpose

The Commissioner has given notice that the ATO will collect data from cryptocurrency designated service providers, under notice, to identify individuals or businesses who have or may be engaged in buying, selling or transferring cryptocurrency during the 2014-15 to 2019-20 financial years.

The purpose of this data matching program is to ensure that taxpayers are correctly meeting their taxation and superannuation obligations in relation to cryptocurrency transactions and ownership. These obligations may include registration, lodgement, reporting and payment responsibilities.

“The ATO is also working in a joint international effort as part of the Joint Chiefs of Global Tax Enforcement (J5), aimed at investigating cryptocurrency-related tax evasion and money laundering,” Mr Day said.

Taxpayers will be given a chance to clarify information obtained from the DSP

Following the data matching exercise, people may be contacted by the ATO and given the opportunity to verify the information collected, before any compliance action is undertaken.

People will be given at least 28 days to clarify any information that has been obtained from the data provider.

CPA Australia’s Head of External Affairs observes a major issue

CPA Australia’s Head of External Affairs, Paul Drum, has commented in ATO on the hunt for cryptocurrency tax evaders and Crypto transactions in ATO sights with the new data-matching program.

He observed a major issue, which is whether investors who made significant gains in prior years will have the capacity to pay the big tax bills they are likely to owe and that accountants should start asking clients about any cryptocurrency transactions as part of their tax-time checklist.

For cryptocurrency tax concerns, please contact the accountants at our Sydney office

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