The ATO are now data-matching with exchanges registered with AUSTRAC.
Click here for article on Accountants Daily: “They are talking about 500,000 to 1 million taxpayers, and in a country with a population of 25 million, that is quite astounding that it’s the number that it has grown to already.”
Click here for the ATO Media Release: "The ATO will give taxpayers 28 days to clarify any information that has been obtained from the data provider, before any compliance action is taken."
Public Accountants' commentary - click here: "Data to be provided to the ATO will include cryptocurrency purchase and sale information. ... This data will be collected under notice from the DSPs on an ongoing basis."
We understand that their data-matching involves the cross-referencing of taxpayers' personal details against details obtained from the exchanges. The ATO may also receive data from overseas government agencies (an anti-money laundering global task force) and search publicly available information on the blockchain.
If you've already lodged tax returns declaring all your trades, you may not be concerned. However, the absence of capital gains tax schedules or trading business activity in the tax returns of identified taxpayers could trigger ATO audits, lodgment demands and default assessments.
Those who invested prior to the 2018 financial year would be of most interest to the ATO. Most who started investing in 2018 would have incurred losses and therefore wouldn't have a tax liability. It's still a good idea to declare your losses, though, to be transparent. Capital losses can be carried forward to offset future capital gains, too.
It stands to reason that the ATO will be targeting investors with the highest capital gains and associated tax payable. The ATO impose tax shortfall penalties of 25% to 75%, which substantially increase their yield from audits that result in tax payable.
For further advice or assistance, please do not hesitate to contact our office for an initial consultation.