ATO conducting cryptocurrency tax sweep

The Australian Taxation Office is conducting a sweep of Australian cryptocurrency designated service providers (DSPs) to help ensure those trading in cryptocurrency are paying the right amount of tax.

The ATO is in the process of collecting bulk records from the DSPs that were required to register with financial intelligence agency AUSTRAC under new laws introduced last year, with the goal of conducting data matching with individuals’ tax returns.

DSPs are being required to turn over data including cryptocurrency purchase and sale information on an ongoing basis.

If data matching detects significant discrepancies, individuals will be given 28 days to verify the information and provide any clarification, before being hit with any penalties for non-payment of tax.

The ATO will work with AUSTRAC, ASIC and other regulators on the tax sweep. The agency is also working as part of the Joint Chiefs of Global Tax Enforcement — comprising tax authorities in Australia, Canada, the Netherlands, the UK and the US — on an international investigation into cryptocurrency-related tax evasion and money laundering.

“We want to help taxpayers to get it right and ensure they are paying the correct amount of tax,” ATO Deputy Commissioner Will Day said.

“Where people find that they have made an error or omission in their tax return, they should contact the ATO as soon as possible. Penalties may be significantly reduced in circumstances where we are contacted prior to an audit.”

Image credit: ©stock.adobe.com/au/chakisatelier

Please follow us and share on Twitter and Facebook. You can also subscribe for FREE to our weekly newsletter and quarterly magazine.