The government of Australia is eyeing crypto traders as it establishes a taskforce to ensure tax compliance.
If there’s one thing that’s near and dear to the hearts of national governments, it’s taxes. The gathering (and spending!) of revenue is what keeps the wheels of government turning. Of course, some cynical folks would say spending taxpayer money ensures that palms are greased and votes are bought.
No matter the case, governments frown at any attempt to circumvent paying taxes, which is where cryptocurrency comes into play. Australia is the latest country to begin working on keeping a closer eye on crypto transactions for tax purposes.
Nobody Escapes the Tax Man
Due to its decentralized nature, cryptocurrency does pose some tracking and taxation challenges for governments. The Australian government is worried that people are not paying their fair share of taxes due to gains made in the rise of cryptocurrency.
There’s good reason for this fear as the recent IRS/Coinbase legal battle showed. When examining user accounts for the crypto exchange, the IRS found that only 0.2% of users declared a loss or gain from their cryptocurrency trading.
To ensure that doesn’t happen in the Land Down Under, the Australian Tax Office (ATO) is creating a taskforce that will monitor cryptocurrency transactions. The goal is to make sure that the exact taxes owed are being paid — especially as crypto use expands into sectors like entertainment and online casinos in Australia, where digital assets are increasingly used for gaming and investment.
Nailing Down the Details
The ATO’s taskforce will be comprised by a group of specialists from multiple sectors: banking, technology, finance, and tax law. This group will come up with strategies to follow the money in crypto trading. The first meeting of this group will take place next month.
A spokesman for the ATO said:
We are consulting with key stakeholders who have expressed an interest in tax issues relating to cryptocurrencies. We will discuss common queries and scenarios, practical issues and the tax implications for current and anticipated future developments in relation to cryptocurrencies.
The ATO is also looking into how to tax virtual currencies and what tax liabilities may exist. As of now, cryptocurrency is considered an asset for calculating capital gains and not as fiat currency for tax purposes.
You can bet that more and more regulations will be used to tie down Bitcoin and its virtual brethren. It was just late last month when Australian banks reportedly began freezing bank accounts associated with Bitcoin users.
What guidelines do you think the Australian Tax Office will come up with in regards to cryptocurrency? Let us know in the comments below.
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