Australia’s tax office is reportedly looking to obtain 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 assist in identifying traders who may have failed to pay taxes on their crypto trades, according to a notice issued last month. The ATO will be requesting personal information such as users’ date of birth, social media accounts, and phone numbers, as well as transaction-related details like wallet addresses, types of coins traded, and bank account details.
Unlike other foreign currencies, cryptocurrencies are considered taxable assets by Australian regulators. This means that traders are required to pay capital gains tax on the profits obtained from selling crypto assets. The news of this potential tax collection crackdown comes at a time when crypto investors are experiencing significant profits. Bitcoin (BTC) has surged by over 44% since the start of the year, while Ether (ETH) has risen by 32% year-to-date (YTD). The market capitalization of top altcoins, excluding Bitcoin and Ether, has also increased by more than 27% YTD, as per TradingView data.
The complex nature of the cryptocurrency space can lead to a lack of awareness regarding tax obligations, as highlighted by the ATO’s notice. However, Australia is not the only jurisdiction seeking to collect unpaid taxes on digital asset gains. The Canada Revenue Agency (CRA) is reportedly conducting over 400 crypto-related audits and investigating numerous crypto investors to recover 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 country. Meanwhile, regulators in the United States are proposing to raise the long-term capital gains tax rate to 44.6% for high-earning investors and impose a 25% tax on unrealized gains for ultra-high-net-worth individuals.