The ATO issued a guidance regarding this matter, indicating that cryptocurrency (specifically Bitcoin) is not seen as money or foreign currency.
The Australian Tax Office (ATO) is targeting cryptocurrency investors for taxable gains.
According to reports, the Australian Tax Office (ATO) has tightened its grip so as to chase down tax through cryptocurrency investors. ATO will focus on targeting cryptocurrency alongside work expenses and incorrect claims.
Earlier this year also, the ATO issued a guidance regarding this matter, indicating that cryptocurrency (specifically Bitcoin) is not seen as money or foreign currency. The authority asserted that since Bitcoin is not a personal use asset, therefore, normal Capital Gains Tax rules are applicable.
According to Mark Chapman, H&R Block’s director of tax communications, these were areas that had seen “systemic abuse”, costing the budget over $2.5b a year. He told that now authorities would be more focused on cracking down on the “systemic abuse” of work expenses and dishonest claims and cryptocurrency.
So as to investigate cryptocurrency investors, 100-point identification checks to implement data-matching techniques will be used. Chapman stated,
“A lot of people simply aren’t aware of their tax obligations — cryptocurrency is a Wild West area with regards to tax — but it’s essential to be aware that there are potential tax obligations surrounding capital gains and income tax, depending on if you are investing or trading.”
Australia has seen various crypto-related developments lately. Brisbane airport in January this year became the world’s first to accept cryptocurrencies for retail and services. However, on the negative side, the bank CBA banned the purchase of cryptocurrencies with credit cards.
It is noteworthy that not only Australia but other countries are also tightening rules for cryptocurrency taxes. As per latest report, 0.04% of US cryptocurrency users are paying taxes. In a survey that included 250,000 Americans, over 57% declared that their crypto transactions are subject to taxation.
Now it is to be seen how governments across the globe will treat cryptocurrencies in terms of tax laws in future.
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