The Australian Taxation Office (ATO) is cracking down on crypto users, with approximately 1.2 million accounts under scrutiny for potential tax discrepancies. This move comes as interest in crypto continues to surge, prompting the ATO to delve into personal data and transaction details provided by crypto exchanges.
The ATO’s latest initiative aims to combat tax evasion by uncovering any unreported exchanges of crypto assets for currency or other goods and services. With the complexity of the crypto industry often leading to a lack of awareness about tax obligations, the ATO is seeking to regulate and educate traders on their fiscal duties.
Australia treats crypto as assets, not as foreign currency, meaning investors must pay capital gains tax on profits made from selling crypto assets and when trading digital assets. The ATO’s reinforced efforts underscore a commitment to ensuring all taxable activities are transparent and properly reported.
The popularity of crypto assets in Australia is evident, with a treasury report revealing that over 800,000 taxpayers have transacted in digital assets over the past three years, showing a significant 63% increase in 2021. According to Statista, crypto revenue in Australia is projected to reach $1.6 billion by 2028, growing at a compounded annual rate of 10.15%.
In addition to the ATO’s crackdown, the Australian Securities Exchange (ASX Ltd.) is gearing up to introduce Bitcoin exchange-traded funds (ETFs), with approvals expected before the end of 2024. Companies like BetaShares and DigitalX Ltd. are preparing to launch their ETF products pending regulatory approval, while VanEck has reentered the Australian market with a renewed application for Bitcoin ETFs, signaling growing institutional interest in crypto investments.
The potential influx of capital from Australia’s $2.3 trillion pension sector into these new financial instruments could significantly boost the crypto ETF market, particularly with self-managed superannuation funds offering a promising opportunity for diversification into cryptocurrencies. Stay tuned for more updates on this major tax crackdown by the ATO.
