The Australian Taxation Office (ATO) is undergoing a data matching service to ensure an estimated one million people investing in cryptocurrency are paying the right amount of tax and cracking down on those who make incorrect disclosures.
The organisation would ollect bulk records of cryptocurrency purchase and sale information from designated service providers which will make up "a key element" of the ATO’s compliance programme.
Cryptocurrency has seen significant growth in Australia with an estimated 500,000 to one million people investing in the assets and the ATO is concerned it can be used to move funds within the black economy or hide money offshore.
ATO deputy commissioner, Will Day, said: “The ATO uses third-party data to improve the integrity of the tax system by identifying taxpayers who fail to disclose their income details correctly. We also use third-party data to assist taxpayers in meeting their tax obligations through pre-filling of tax returns.”
Following the exercise, anyone contacted by the ATO will have 28 days to verify the information collected, either by requesting a self-amendment or making a voluntary disclosure, before any compliance action is taken.
Day said: “We want to help taxpayers to get it right and ensure they are paying the correct amount of tax. 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.”
The ATO would be working with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Securities and Investments Commission (ASIC) to ensure the tax law requirements align with the whole of system approach.