The Australian Tax Office is reportedly seeking personal data and transaction details from up to 1.2 million cryptocurrency exchange users in a bid to crack down on cryptocurrency tax obligations.
The Australian Taxation Office (ATO) said the data will help identify traders who have failed to pay taxes on cryptocurrency transactions, according to a notice seen by Reuters last month.
ATO collects personal data including your date of birth, social media accounts, and phone number, as well as transaction-related details such as wallet address, coin transaction type, and bank account information.
For Australian regulators, cryptocurrencies are taxable assets, unlike other foreign currencies. This requires traders to pay capital gains tax on profits from selling cryptocurrency assets.
News of a potential tax collection crackdown comes at a lucrative time for cryptocurrency investors. Bitcoin (BTC) is up more than 44% since the beginning of the year, while Ethereum (ETH) is up 32% YTD.
Excluding Bitcoin and Ethereum, the market capitalization of top altcoins has also increased by more than 27% YTD, according to TradingView data.
According to a notice from the ATO, the complex nature of the cryptocurrency space may result in a lack of awareness of tax obligations.
“The ability to purchase cryptocurrency assets using false information may be attractive to those looking to evade their tax obligations.”
Global cryptocurrency tax crackdown may begin
Australia is not the only jurisdiction seeking to collect unpaid taxes from digital asset gains.
According to a May 6 report, Canada Revenue Agency (CRA) Compliance Director-General Sahil Behal said the agency was conducting more than 400 cryptocurrency-related audits to secure unpaid cryptocurrency taxes and had hundreds of crypto users involved. They said they were investigating currency investors. By National Post.
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The audit comes in addition to $39.5 million worth of unpaid taxes owed by the Canada Revenue Agency from the 2023-2024 fiscal year.
In Turkey, the government plans to introduce cryptocurrency-related legislation later this year. The new law is expected to provide a legal basis for cryptocurrency tax in Turkey, a leading cryptocurrency economy.
U.S. regulators are aiming to increase the long-term capital gains tax rate to 44.6%, but this would only apply to investors earning more than $1 million a year.
The Biden administration’s identical federal budget proposal also included a 25% tax on the unrealized profits of ultra-high-net-worth individuals.
“For 99.9% of people, it’s a big, fat-free burger because it’s essentially just a suggestion,” Matthew Walrath, founder of Crypto Tax Made Easy, told Cointelegraph.
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