Australia’s tax office is reportedly requesting personal data and transaction details from around 1.2 million cryptocurrency exchange users as part of a potential crackdown on crypto tax obligations. The Australian Taxation Office (ATO) stated that this data will help identify traders who have failed to pay taxes on their crypto trades. The ATO is seeking personal information such as users’ date of birth, social media accounts, and phone numbers, as well as transaction-related details including wallet addresses, type of coins traded, and bank account information.
Unlike other foreign currencies, cryptocurrencies are considered taxable assets by Australian regulators. This means that traders are required to pay a capital gains tax on profits made from selling crypto assets. The announcement of this potential tax collection crackdown comes at a time when crypto investors are experiencing significant profits. Bitcoin (BTC) has rallied over 44% since the beginning of the year, while Ether (ETH) has risen 32% year-to-date. The market capitalization of the top altcoins, excluding Bitcoin and Ether, has also increased by over 27% year-to-date.
The complex nature of the cryptocurrency space can lead to a lack of awareness when it comes to tax obligations, as stated in the ATO’s notice. Australia is not the only jurisdiction seeking to collect unpaid taxes from digital asset gains. Canada’s tax agency, the Canada Revenue Agency (CRA), is reportedly conducting over 400 crypto-related audits and investigating hundreds of crypto investors to secure unpaid crypto taxes. In Turkey, the government is expected to introduce crypto-related legislation later this year to establish a legal framework for crypto taxes. In the United States, regulators are considering raising the long-term capital gains tax rate to 44.6%, but only for investors earning over $1 million a year. Additionally, the Biden administration’s Federal Budget proposal includes a 25% tax on unrealized gains for ultra-high-net-worth individuals.
Overall, global regulators are taking steps to ensure that individuals who profit from cryptocurrencies fulfill their tax obligations.