The Australian Tax Office says it cannot rely on crypto users’ own records

The Australian Taxation Office (ATO) says it cannot rely on crypto investors to track crypto transactions and their returns – even though most investors do their best.

Speaking at the 14th ATAX International Conference on Tax Administration on November 23, ATO Commissioner Chris Jordan stressed that many new crypto investors may not fully understand their tax reporting requirements. :

“In an area that is growing rapidly with new investors, we cannot rely on taxpayers to know that they must document and disclose capital and capital gains on their tax returns.”

“Our main concern is that many taxpayers believe that their crypto profits will only be tax free or taxable if the holdings are converted into Australian dollars,” he added.

Jordan explained that the ATO was looking for ways to “push” people in the right direction, such as:

The commissioner also said the ATO has improved its transaction data matching capabilities in 2021 by sourcing information from crypto-demand-side platforms (DSPs), share registers and brokers.

“We have expanded our reconciliation protocols to bring in more third-party data to support emerging investments like cryptocurrencies.”

“We’re working hard to improve the way we collect, manage, share and use data, but we’re just the surface,” he added.

Related: Reserve Bank warns Australians not to bet on “fashionable” cryptocurrencies

However, Jordan found that “most people get it right” when it comes to tax filing compliance or that the “tax benefit” of Australian individuals and small businesses with “little or no intervention” is high. .

Chain analysis down

One company that could use the ATO in the future is Chainalysis, a partner of the Commonwealth Bank of Lender of Australia.

On November 24th, Todd Lenfield, Chainalysis Country Manager for Australia and New Zealand, told Australian Money Overview that his company hopes to provide important expertise to AUSTRAC and the ATO.

“We would like to have discussions with AUSTRAC about what they want to regulate and explain to the tax authorities the lessons that can be learned from the actions of the IRS. We can use the experience we’ve gained in this room and give it a local flavor, ”he said.

The company, which now provides blockchain analytics services to the U.S. Department of Investigations and the Internal Revenue Service, also investigated the Russia-based Suex OTC crypto business that the U.S. Treasury Department spent in September for facilitating ransomware payment transactions became.