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Australian Tax Agency Alert to Crypto-Evaders


May 28, 2021 | AtoZ Market-The Australian Taxation Office (ATO) has said it will be looking at cryptocurrency tax evaders, as more than 600,000 Australians invested in digital currencies recently.

In his interview with https://www.news.com.au/ , ATO Assistant Commissioner Tim Loh said that the federal tax office is “alarmed” as “many crypto investors have the false perspective that anonymity in crypto will help them bypass them fiscal obligations”.

Assistant commissioner Tim Loh said the ATO would directly contact about 100,000 taxpayers with cryptocurrency assets explaining their tax obligations and urging them to review their previously lodged returns.

“We also expect to prompt almost 300,000 taxpayers as they lodge their 2021 tax return,” Mr Loh said.

Many taxpayers mistakenly believe their gains from cryptocurrencies like Bitcoin and Ethereum are tax free or only taxable when the holdings are cashed back into Australian dollars, but they are in fact treated similarly to gains from other investments such as shares.

What Mr. Loh said ?

 

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“Generally, as an investor, if you buy, sell, swap for fiat currency, or exchange one cryptocurrency for another, it will be subject to capital gains tax and must be reported,” Mr Loh explained.

“For example if you exchange Bitcoin for Ethereum, that would trigger a taxable transaction.

“If you swap crypto currency for Australian dollars is another potential taxable transaction and when you buy goods and services with cryptocurrency it can also potentially create a taxable transaction.

Mr. Loh noted that “The best tip to nail your cryptocurrency gains and losses is to keep accurate records, including dates of transactions, the value in Australian dollars at the time of the transactions, what the transactions were for, and who the other party was, even if it’s just their wallet address,”.

However, it was not all bad news for the nvestors, because the official stated:

“There’s good news for crypto investors who are in it for the long haul since if you hold for at least 12 months – known in the crypto world as “hodling”, a deliberate misspelling of “holding” – you may be entitled to a CGT discount if you have made a capital gain.

Meanwhile, the Australian government has designed policies to support investors in cryptocurrencies, trying to maintain the balance between its regulatory function and the growth and consumption of these digital assets.

Tax-smart tips for your cryptocurrency investment

Australia is one of the countries where digital currencies have gained the most momentum in recent years.

Managing one of the most solid economies in the world, the nation offers one of the most prosperous spaces for the commercial evolution of these assets, due to its potential as an investment mechanism to derive a high profit margin in the short and medium term.

 

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