Australia forces 600000 crypto users to pay taxes

The Australian Internal Revenue Service (ATO) released a statement asking 600 cryptocurrency users in the country to pay taxes on their profits during the next tax period.

The Australian Government has taken action to suppression of crypto traders and crypto activity after discovering significant investment growth since 2020.

The government has made it clear that the anonymous cryptocurrency mechanisms will not hide or excuse Australian crypto traders from the tax authorities.

Assistant Commissioner Tim Lo explained that financial regulators will track these traders through their bank accounts:

“We are alarmed that some taxpayers believe that the anonymity of cryptocurrencies gives them a license to ignore their tax obligations. Although it seems that cryptocurrency operates in an anonymous digital world, we are closely monitoring where it interacts with the real world, using data from banks, financial institutions and online cryptocurrency exchanges to track the return of money to the taxpayer. "

ATO will use data from bank accounts and extrapolate from previous tax returns. This ensures that traders are paying sufficient tax. Crypto assets will be taxed as income based on how much Australian dollars their cryptocurrency is worth.

The IRS will specifically contact over 100000 cryptocurrency holders and encourage over 300000 others to report their gain or loss on their 2021 tax return.

2021 has been an active year for Australian financial regulators fighting to create the conditions for the ever-changing field of cryptocurrency. The Australian Senate Ad Hoc Committee on Australia as a Technology and Financial Center announced in May that it will be looking into how crypto assets can be regulated in the country.

A parliamentary inquiry aims to regulate cryptocurrency with the aim of strengthening the local fintech sector and encouraging financial innovation.

Regulators see this as an appropriate move as the popularity of cryptocurrencies grows in the country. Reports show that some of the country's wealthiest families are buying up digital assets. Presumably, this is their alternative investment for profit, as opposed to stocks or bonds.

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