Binance has faced regulatory heat from several countries across the globe. The Seychelles-based cryptocurrency exchange has found itself being called to task by financial watchdogs in an increasing number of jurisdictions, triggering a number of banking institutions to halt payments to the site.
To avoid the addition of Australia to its ever-widening list of regulatory hot spots, the exchange’s Australian branch has partnered with Koinly, a cryptocurrency tax startup that will educate and help Binance users with their cryptocurrency tax obligations. With the latest deal, Binance users have also been offered access to Koinly’s ATO-compliant tax reporting solution through an integration.
The ATO’s cracking down on crypto owners has intensified in 2021 for tax returns in an effort to bring more than 600,000 people who have bought crypto assets under the tax umbrella. The regulatory entity of the country views crypto as an asset rather than a currency, hence it deems it taxable when bought, sold, or swapped. Robin Singh of Koinly stated
“The ATO is collecting bulk records data from Australian crypto exchanges and comparing it to amounts entered on previous tax returns. Failure to declare crypto gains can attract a penalty of 75% of the outstanding tax liability.”
The news comes as the Australian Taxation Office [ATO] dashed the hopes of cryptocurrency owners when it confirmed that they can no longer avoid their tax bills. Australian Taxation Office assistant commissioner Tim Loh had previously warned crypto owners and was quoted saying, “it is not a game of hide and seek.”
Binance-Koinly Collaboration
The Australian subsidiary of the world’s largest crypto exchange is setting consumer education in the focus. The exchange is already hosting the second in a series of EOFY crypto tax masterclasses for the community. The 2021 edition is shown in partnership with Koinly, where the tax reporting app will concentrate on understanding the ATO’s position in the cryptocurrency ecosystem. It also aims to empower Binance users to report their crypto position correctly in their 2021 returns.
Singh acknowledged that Australia is lucky to have clear guidance on tax rules regarding crypto. However, the need for the Binance taxpayers to keep audit-worthy reporting exposes investors to penalties. Hence, the exec stated that,
“Getting your taxes right is incredibly important, which is why we’re proud to offer reporting that is robust enough for tax agents and audits. With approximately 1 in 6 Australians investing in crypto, taxpayers and tax agents alike are on a steep learning curve. Our community has voiced their concern around tax compliance and we’re committed to supporting them with the resources they need,” said Sam Teoh, of Binance Australia.”