Will anonymity and lack of regulation in Crypto keep the taxman away? Think again!
Your hopes will be dashed. For example, the Australian Taxation Office (ATO) has extended its partnership with Australian Crypto exchanges. This requires them to continue handing over trading data until 2022-23.
The ATO views Crypto as an asset, not a currency. This means it’s taxable when swapped, sold or bought. This new data will make it much simpler for the ATO to track Crypto investors. They will cross check with data submitted in tax returns.
In the UK, if HMRC suspects tax evasion,taxpayers must give over data about their Crypto holdings. In the USA, the IRS has begun to focus on tax evasion with cryptocurrencies. They’re employing cutting-edge data analytics to pinpoint transactions that Crypto users had assumed, wrongly, were concealed. The IRS has already ordered Crypto exchange, Kraken, to disclose data about their users.
Tax authorities are waking up to the possibilities of tax evasion that cryptocurrencies hold. And they are rapidly taking action. Even when Crypto transactions are legitimate, failing to report could carry severe penalties. To reduce the tax risk on your Crypto holdings, please seek advice from a professional tax advisor.
