Recently, the Australia Tax Office [ATO] has moved its attention to the taxes applicable in the digital assets space. As a result, it will extend its tax obligations on crypto holders as well. The authority has decided to catch the tax non-payers via its latest techniques in data matching.
ATO also plans to seek support from other countries to keep a check on the tax amounts paid by the Australians. This comes after an intense wave of cryptocurrency adoption that has hit the Australian retail sector. Several small and big vendors in the tourism and pharmaceutical industries have begun to accept cryptocurrency payments.
This is the first time ever that the cryptocurrency community will have to declare taxes for their possession. According to an Australian finance magazine, any future attempts by the crypto investors, to avoid or deter their tax responsibilities will be under the radar of ATO. The ATO also has a ‘hit list’ to counter those in violation of the tax regulations.
Despite the expertise of the crypto-community in the field of anonymity, ATO is seen to be handling the process of crypto-related tax collection relatively well. The country has also updated and tightened its laws concerning money laundering. These strengthened laws have given authorities a green signal to investigate any investor’s identity involved in the cryptocurrency space in the country.
ATO not just targeted digital assets in Australia, but is aiming to stretch its boundaries to offshore firms hiding crypto assets. To keep the amounts of offshore crypto-related income under the radar, Australia will be in a data-sharing agreement with other nations.
On ‘who the crypto taxes will be applicable to’, Martin Jacobs [Deputy Commissioner, ATO] said:
“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.”
The commissioner also stated that this category will not fall under tax obligations.
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