The Australian Tax Office (ATO) has implemented a new tracking program that will allow it to identify cheaters every tax season starting this year. As 30 June marks the last day to file taxes in the country down under, those cashing out on their crypto and not reporting the gains will receive responses from the ATO, at best. Repeated failures to report gains will attract enforcement action.
Crypto users must start reporting and paying their taxes despite the exchange they use to sell their assets–the ATO will track data from Coinbase, Binance, Coinspot, and many others. It revealed that it would collect user data from such exchanges a few months ago. The regulator will analyze transaction data from the past decade and process and store information like investors’ names, email addresses, social media accounts, and more.
The tax regulator aims to track all the 1.2 million crypto users in its jurisdiction. It acknowledges that most users report their crypto gains and file taxes but is looking to make the minority dishonest with their gains accountable. Investors putting their money into Bitcoin ETFs, and Australia has two listed on two different stock exchanges, must also pay tax on their gains like with any other securities instrument.
The issue some users may face in the coming months is dealing with tax payments for the refunds they will receive from the bankrupt crypto firm Celsius. No clarity exists on whether the refunds will be taxed, as many users might have netted tremendous profits due to the price rises of bitcoin and Ether—the two assets the refunds will occur through—since Celsius went bankrupt.
If users do owe taxes on the refunds because they constitute a crypto deposit and are thus taxable, do users consider the cost basis based on the assets’ prices on the day of their acquisition? Or do they use Celsius’ bankruptcy date? These are genuine questions ex-Celsius users remain perplexed by going into the tax season.
Image by FlyFin Inc from Pixabay
