Australian crypto exchanges to cooperate with ATO to check cryptocurrency reporting
Earlier this week, the Australian Tax Office (ATO) announced the cooperation of Australian cryptocurrency “designated service providers” (DSPs) in calculating the cryptocurrency tax requirements of citizens trading in digital assets. Cutting through the jargon: cryptocurrency exchanges and brokerages in Australia will provide the ATO with trading data, which it will use to check against citizens’ tax returns. The official announcement can be found here.
Although the official announcement does not list the DSPs that will be cooperating, it is likely that Australia’s major exchanges, such as BTC Markets, Independent Reserve and CoinSpot, will be included. The ATO estimates the number of Australians with investments in crypto-assets at between 500,000 and 1 million, most of whom are registered (after fulfilling rigorous “Know Your Customer” requirements) with the above-mentioned exchanges.
The data provided by exchanges will massively simplify the ATO’s process for checking the accuracy of cryptocurrency declarations by enabling it to cross-reference account histories against tax declarations as part of its new data-matching scheme.
More than ever, declaring crypto-asset trading in tax returns is essential.
Fortunately, it is not too late to amend tax returns for the 2017-2018 tax year by “requesting a self-amendment or making a voluntary disclosure”. ATO Deputy Commissioner Will Day nearly directly quoted Cryptocate’s cryptocurrency tax mandate when he said, “We want to help taxpayers to get it right and ensure they are paying the correct amount of tax”.
If you or your clients need assistance in declaring cryptocurrency trading activity, speak to us about our Cryptocurrency Tax Service – and let us do the hard work for you.