Tax

“Enabler of existing risks”: ATO to extend cryptocurrency reach amid concern about black economy activity

Matthew Elmas /

The tax office is embarking on a data-gathering mission to crackdown on cryptocurrency tax dodgers and will be making calls to crypto traders in the coming months.

Announcing plans to collect bulk records from Australian cryptocurrency service providers on Wednesday, the ATO said cryptocurrency and blockchain more generally is an “enabler of existing risks”, including black economy activity and undeclared capital gains.

The data-matching program will extend the ATO’s reach beyond transactions processed through major financial institutions, including new crypto sales information.

While the value of Bitcoin, the most popular cryptocurrency globally, has declined significantly over the last year, the ATO said there are still between 500,000 and one million Australians who have invested in cryptocurrency.

“We want to help taxpayers to get it right and ensure they are paying the correct amount of tax,” ATO deputy commissioner Will Day said in a statement circulated on Tuesday afternoon.

“Where people find that they have made an error or omission in their tax return, they should contact the ATO as soon as possible. Penalties may be significantly reduced in circumstances where we are contacted prior to an audit.”

The ATO says it will contact taxpayers after the data-matching exercise to provide them with an opportunity to verify information “before any compliance action is undertaken”.

Cryptocurrency investors are being advised to correct mistakes by requesting self-amendments or making voluntary disclosures.

It is roping in corporate regulator ASIC and the Australian Transaction Reports and Analysis Centre (AUSTRAC) to assist with the compliance undertaking.

“The ATO is also working in a joint international effort as part of the Joint Chiefs of Global Tax Enforcement (J5), aimed at investigating cryptocurrency-related tax evasion and money laundering,” Day said.

NOW READ: Weathering the crypto winter: Liven raises $14 million and opens sale to the public (but don’t call it an ICO)

NOW READ: Are ICOs here to stay? Despite plunging crypto prices and faltering companies, blockchain startups stay bullish

Advertisement
Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].

FROM AROUND THE WEB