Cryptocurrency regulatory requirements across Western nations tend to be quite lax when compared to their Asian counterparts, but times are changing, especially in Australia.
Aussie Tax Office Wants their Cut of Cryptocurrency Profits
The ATO have warned Aussie crypto traders and exchanges that they must declare their cryptocurrency profits as the tax regulators are looking to enforce greater transparency. Reading between the lines, it means they want their cut and are hell-bent on getting it.
Digital asset exchanges across Australia must now verify the identity of their users and will need to report any transactions over $10,000 that are deemed ‘suspicious’. Although the ATO have cited this is linked to Aussie anti-money laundering and anti-terrorism finance laws, many crypto users will see this differently.
A spokesperson for the ATO recently made a statement reported in the Australian Financial Review that said:
While there is no specific label on the capital gains schedule or income tax return to identify how many people have invested in cryptocurrency we are still looking at lodgment activity this year to determine any significant impact of cryptocurrencies.
Are the ATO Reacting to Increased Tax Questions?
Although to the laymen it would appear that the ATO is simply trying to enforce greater transparency so they can get their taste of the action, they are apparently just reacting to an increase of queries in regards to the tax obligations on those making cryptocurrency profits by saying:
We have observed through our ATO community channel and advice areas an increase in questions relating to tax obligations of cryptocurrency activity, which we see as a positive in people wanting to do the right thing in meeting their obligations.
It’s all about people doing the right thing. Of course!
If you are an Aussie crypto trader and you want to ensure you meet the ATO’s taxation laws on cryptocurrency profits, you will have to keep records and dates of your crypto transactions. You will have to show the amount in Aussie dollars and name the purpose of your transactions and other parties involved in the trade.
Although many will cite that such transparency is essential if crypto is to evolve, most crypto supports will believe this goes against the whole ethos of cryptocurrency.