As an experienced tax analyst, I believe that the Australian Tax Office’s (ATO) new tracking program is a necessary step towards ensuring fairness and accountability in the crypto community. With more than 1.2 million crypto users in Australia, it is essential to maintain transparency and compliance with tax laws.
Starting this tax season, the Australian Tax Office (ATO) has introduced a new tracking system to identify undeclared cryptocurrency gains. As a responsible crypto investor, I make sure to report all my capital gains to avoid any unwanted attention from the ATO. The deadline to file taxes in Australia is 30 June, so those who cash out their crypto holdings without reporting the gains may receive queries or worse, face enforcement action for non-compliance.
Crypto users are obligated to begin reporting and paying taxes on their digital asset sales, regardless of the specific exchange they utilize. Notably, the Australian Taxation Office (ATO) intends to gather data from platforms such as Coinbase, Binance, Coinspot, and numerous others. The ATO announced this intention several months ago. They will scrutinize transactional data dating back a decade and record information like investors’ names, email addresses, social media handles, among other details.
The tax authority intends to monitor the cryptocurrency activities of the approximately 1.2 million users under its purview. While most users are compliant and report their crypto earnings for taxation purposes, the authority seeks to hold accountable the minority who have yet to come forward with their gains. Those investing in Bitcoin ETFs, which are available on two Australian stock exchanges, will likewise need to pay taxes on any resulting profits, just as they would with other securities investments.
Some users could encounter a challenge in handling tax obligations for the upcoming refunds they are expected to receive from the insolvent cryptocurrency company, Celsius. However, it remains uncertain if these refunds will be subjected to taxes, considering that substantial profits were made by several users due to the significant price increases of Bitcoin and Ether since Celsius’ bankruptcy filing.
As a tax analyst, I understand that ex-Celsius users are facing uncertainty regarding the cost basis determination for taxes on refunds derived from crypto assets. The question is whether they should base their cost basis on the assets’ prices at the time of acquisition or instead use the bankruptcy date of Celsius.
Image by FlyFin Inc from Pixabay
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2024-06-30 22:58