The Australian Taxation Office (ATO), the country’s revenue collection agency, is set to contact hundreds of thousands of crypto traders on their tax obligations.
“Over the next two months we expect to contact as many as 350,000 individuals who have traded in cryptocurrency in the last few years,” an ATO spokesman told news.com.au in a report published Wednesday.
Cryptocurrencies in Australia are considered as property, and therefore, are subject to capital gains tax and must be reported to the ATO.
The ATO spokesman said crypto investors should ensure they keep records of their transactions. These include dates of transactions, their value, what were those transactions for and who were other parties involved.
The spokesman further said that those who sold cryptocurrency during the 2017-18 financial year may also be contacted by the tax authority, asking them to review their return and report correct capital gains. Those who fail to review could be audited, per the report.
“The ATO is giving you the chance to fix it, but if you choose not to, what normally happens is you will go through the formal audit process,” Mark Chapman, H&R Block’s director of tax communications, was quoted as saying in the report. “If you’ve done the wrong thing, you will have to pay the tax you should have the first time which can be pretty expensive and there might also be some interest on top of that, so the financial downsides of not doing this right are considerable.”
In a similar development last year, the U.S. Internal Revenue Service (IRS) also sent out notices to crypto holders, listing specific amounts of money they owe to the tax agency.
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