The Australia Tax Office (ATO) has sent a message to all digital currency holders or investors last Friday Demystifying the notion that their transactions are anonymous, thereby allowing them to avoid paying their taxes.
According to a local news channel, news.com.au, the ATO called the failure of more than 600,000 crypto investors to declare their assets for reasonable tax payments as “alarming”.
Tim Loh, the ATO’s deputy commissioner, said one of the biggest myths is that people believe crypto is more of a currency than an asset, as the ATO classifies it. The tax office said it would write to 100,000 taxpayers with traces of crypto investors to review their previous tax returns. The agency also plans to induce an additional 300,000 taxpayers to disclose their gains or losses in relation to digital currencies.
The drive to get crypto holders to pay their taxes isn’t unique to Australia. The United States of America, Norway, and the United Kingdom are also at the forefront of leading crypto tax campaigns. This tax is often levied as capital gains tax, and a fundamental challenge for all is that holders typically do not declare their taxholders.
The ATO announced that crypto owners or investors are not anonymous as it collects and validates data from banks, financial institutions and trading platforms. It is well known by those involved in digital forex trading.
“(We) follow the money trail back to the taxpayer, and we do this through the ATO, which has data reconciliation profiles with Cryptocurrency exchanges, and they provide that information to us, and we use that information to match people’s tax returns, ”he told the news agency. He added, “There is no game of hide and seek, we have this information and all we ask people to do is obey the rules. We know that most Australians obey the rules. ”
Loh recommended accurate record keeping of transactions and a proper tax return as the only way to avoid penalties under the law.
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