It was back in March of 2020 when the Australian Taxation Office (ATO), the tax administration entity for Australia, announced that it planned to do one of the largest crypto tax crackdowns in its history. Threats were made, and news.com.au reported that the tax regulator was making plans to send out crypto tax warnings to as many as 350,000 Australians. Ever since, though, all has been quiet, but it seems ATO had planned on going through with its threat.
These letters were sent out with the intent to educate Australia’s taxpayers in regard to the role cryptocurrencies play within the age-old practice of tax reporting. The individuals that received the letters will now have an opportunity the amend the returns, then promptly pay the applicable taxes. It should be noted, however, that these letters look a lot like the letters the IRS had sent to almost 10,000 US taxpayers, having sent out two kinds of it in the past.
The interesting thing about this, is these letters sent by the ATO has targeted a vast range of crypto users, seemingly uncaring over the size of their crypto holdings, in particular. In general, the tax authorities of the world, the IRS being a prime example, were far more keen on focusing on the cases where very large amounts of USD were tied up, since this would justify the administration costs. It seems the ATO justified all the administration costs for all crypto holders it could find.
Similar To US Taxation
In terms of legislation, the taxation of crypto within Australia is quite similar to that of the US, for the most part. Within the Australian tax code, cryptocurrencies are seen as a “form of asset.” What this means, is they stand subject to capital gains taxes, as a result. So, the trading, selling, or exchanging of crypto, then the subsequent conversion of it into fiat currency, can trigger a taxable event. The same counts for the use of it to obtain goods or services. The record-keeping of this taxation is similar to their US counterparts, as well.
A New Norm
The recipients of these ATO crypto tax notices are very much urged to seek out some form of reliable crypto tax software in order to complete their tax filing, or otherwise amend their previous returns, as well.
It seems that Australia has started to put its foot down against the crypto community. While a very unpleasant thing to address, it’s important that citizens obey the laws of the country, lest they suffer the consequences of it. As such, any US reader that is within this situation is urged to comply with the ATO.