The Australian Taxation Office (ATO) shows concerns towards its cryptocurrency investors. They found that many taxpayers believe that their cryptocurrency gains are tax-free. They only pay tax when they convert them back into the Australian dollar.
At the beginning of 2020, ATO data shows a dramatic increase in trading. According to ATO, 600,000 Aussies have invested in cryptocurrency recently.
Assistant Commissioner Tim Loh said, “This year ATO will be writing around 100000 taxpayers with cryptocurrency assets, explaining them to review their previously lodged returns.”
He also said, “We will also be prompting almost 300,000 people as they lodge their 2021 tax return to report their cryptocurrency capital gains or losses.”
In 2020, ATO contracted around 100,000 taxpayers who trade cryptocurrency and prompted 140,000 taxpayers at lodgment.
Mr. Loh said, they are “alarmed” as some taxpayers think that the anonymity of cryptocurrency provides them with a license to ignore their tax obligations.
ATO is closely tracking where cryptocurrency interacts with real-world data from banks, financial institutions, and cryptocurrency exchanges.
You must report when you buy, sell, swap for fiat currency, or exchange one cryptocurrency for another. All profits over them subject to Capital Gains Tax. CGT also applies to the disposal of non-fungible tokens.
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He explained, “Cryptocurrency gain or loss should keep accurate record including date of transaction, the value in Australian dollar at the time of transaction. All transactions from was for, all should be in a proper manner.”
Mr. Loh said the ATO knows cryptocurrencies can be complicated and focus on helping people get it right.
