The Australian Tax Office (ATO) is vigilantly monitoring individuals who have realized profits from their cryptocurrency investments before the conclusion of the country’s fiscal year on June 30, as taxpayers commence the process of submitting their tax returns prior to the month’s end.
“The ATO has maintained a close watch on the realm of crypto in recent times — and this year is no different,” remarked Adam Saville-Brown, the general manager of Koinly, a platform specializing in crypto tax reporting, speaking to Cointelegraph.
The ATO has overhauled its cryptocurrency data matching initiative to gather information spanning from 2014 to 2026 from “any legitimate crypto exchange operating within Australia,” as elucidated by Michelle Legge, Koinly’s head of tax education.
“Regardless of whether you utilize Binance, Coinbase, CoinSpot, or any other platform, the ATO will possess the means to access your data,” she emphasized.
Anticipated to procure details like names, addresses, emails, as well as social media accounts and IP addresses of around 1.2 million cryptocurrency investors annually, this program is an initiative set forth by the ATO.
Saville-Brown noted that most cryptocurrency investors in Australia are cognizant of their tax obligations, but the program is likely to ensnare the remaining few investors who are non-compliant.
Individuals failing to file their taxes accurately might receive correspondence from the ATO reminding them to report their crypto transactions correctly, as a minimum requirement.
Confusion may arise from Celsius refunds
The guidance provided by the ATO is unclear regarding the handling of refunds in Bitcoin (BTC) and Ether (ETH) from the insolvent American crypto lender Celsius, potentially leaving the lender’s users baffled over the tax repercussions tied to their refunds, as highlighted by Saville-Brown.
Depositing cryptocurrencies can trigger a taxable event, resulting in gains for some individuals based on the purchase price.
“Uncertainty looms among investors regarding the calculation of their profit or loss, particularly the valuation method selected as their cost basis,” mentioned Legge.
The ATO has yet to offer definitive guidance on whether investors should adhere to standard accounting procedures or consider alternatives, such as the original cost basis for those specific assets, or opt for the asset’s valuation at a specific time, like the day when withdrawals were limited or the date of the bankruptcy filing.
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Saville-Brown recommends consulting with a proficient accountant to ascertain the tax liability, given that the refunds could lead to either taxable gains or losses.
Tax implications persist for Bitcoin ETFs
Australia saw the debuting of two Bitcoin exchange-traded funds (ETFs) this month, with one ETF directly holding Bitcoin for the first time, while the other was launched on the nation’s primary stock exchange—marking another first.
Despite these innovative products, the existing tax regulations will apply, necessitating investors to pay Capital Gains Tax post selling holdings from a Bitcoin ETF and accruing gains, Legge explained.
“While the introduction of Bitcoin ETFs on the Australian stock market signifies a positive step towards wider cryptocurrency adoption, investors should be prepared to address tax liabilities associated with these investments,” she added.
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