The Australian Tax Office (ATO) has announced that they would be tracking Australian citizens who currently hide their crypto assets in foreign exchanges and offshore accounts by using data-sharing agreements with other countries.
The ATO has officially considered cryptocurrencies as assets and hence want to ensure that its hundreds of thousands of holders are taxed appropriately. CPA Australia, Australia’s prime accounting body, estimates that most of the cryptocurrency holders would be filing their cryptocurrency taxes for the first time this year and that many would seek to evade them by storing them in foreign wallets and exchanges.
As reported by the Australian Financial Review, ATO’s deputy commissioner Martin Jacobs was quoted as saying,
Where people attempt to deliberately avoid these obligations we will attempt to take action. We have a range of existing powers that are designed to address unexplained wealth and conspicuous consumption that may arise through profits derived through cryptocurrency investment.
Building upon his ‘range of existing powers’, the ATO is reportedly utilizing advanced international data-matching techniques along with a 100-point identification step system to identify and prosecute such cryptocurrency tax evaders.
However, Jacobs assured the public that such comprehensive measures would most probably be restricted to a few individuals with this statement,
Our feeling is that the vast majority of investors who joined the bubble in 2017 are likely to be in the loss position as opposed to a gain. The other assumption is they probably haven’t disposed of their cryptocurrency. They might just be holding it.
Moreover, Australia recently became part of the Joint Chiefs of Global Tax Enforcement (J5 Alliance), which includes Great Britain, Canada, the United States and the Netherlands. They also publicly released several statements vowing to curb financial tax-evasion and other related crimes being undertaken through cryptocurrencies.
A lot remains to be seen as to how successful the ATO would be this coming tax season in implementing their new regulations on cryptocurrencies.