Australia’s tax office is reportedly requesting personal data and transaction details from approximately 1.2 million cryptocurrency exchange users in order to crack down on tax obligations related to cryptocurrencies. The Australian Taxation Office (ATO) stated that this data will help identify traders who may have failed to pay taxes on their crypto trades. The ATO is seeking personal information such as users’ date of birth, social media accounts, and phone numbers, as well as transaction-related details like wallet addresses, type of coins traded, and bank account information.
Unlike other foreign currencies, cryptocurrencies are considered taxable assets in Australia, which means traders are required to pay a capital gains tax on any profits from selling crypto assets. This potential tax collection crackdown comes at a time when crypto investors are experiencing significant profits. Bitcoin (BTC) has rallied by over 44% since the beginning of the year, while Ether (ETH) has risen by 32% year-to-date. The market capitalization of the top altcoins, excluding Bitcoin and Ether, has also increased by over 27% this year.
The complex nature of the cryptocurrency space often leads to a lack of awareness regarding tax obligations. Australia is not the only jurisdiction seeking to collect unpaid taxes from digital asset gains. Canada, for example, is conducting over 400 crypto-related audits and investigating hundreds of crypto investors to secure unpaid crypto taxes. Turkey is also expected to introduce crypto-related legislation later this year, while in the United States, regulators are considering raising the long-term capital gains tax rate for high-earning investors.
Overall, governments worldwide are taking steps to ensure that individuals are meeting their tax obligations when it comes to cryptocurrencies, as the industry continues to grow and gain mainstream attention.