Many countries across the globe have realized cryptocurrencies are here to stay as an asset. It has prompted these regions to draft new legislation so that digital properties can be closely controlled.
Australia was the latest country to inform users that the cryptocurrency industry was not to be trifled with by issuing a strong warning to investors. The Australian Taxation Office set the brand new target to establish a strong legal framework.
The Australian Taxation Office stated that many investors will be getting individual notices in the coming weeks to remind them of tax obligations. Many holders were still uncertain about these procedures and the Australian Taxation Office (ATO) wanted every sort of misinformation to be eradicated.
Sources said over 350,000 individuals would be contacted by the body via email or letter informing them that cryptocurrencies were a form of property. By this logic, all cryptocurrencies were an asset for capital gains tax purposes.
Users will be required to reveal all financial gains made by buying or selling cryptocurrencies. This can include crypto trade, crypto to Australian dollar conversion and vice verse, obtaining goods or services using crypto. An ATO spokesperson close to the developments said:
“In April last year we published our Data Matching Protocol for cryptocurrency. Under this program we obtain cryptocurrency transaction data from currency exchanges on taxpayers who have bought and sold cryptocurrency,” the Australian Taxation Office spokesman said. Using this data we’ve found that due to the complex nature of cryptocurrencies, some people may not be aware that there may be tax obligations, so our campaign is designed to help raise awareness and give people the opportunity to fix any mistakes.”
All the information about taxation and the brackets that transactions will fall into will be available on the ATO website soon. The regulatory body will contact people who had sold cryptocurrencies during the 2017/2018 financial year so that transparency is maintained. The Australian Taxation Office added that users who do not submit corrected numbers will be subject to audit.
Mark Chapman, the H & R Block‘s director of tax communications revealed that clients were being given the option to correct their numbers before authorities swooped in. The ATO still needs to tally how many clients had sent incorrect numbers and then verify them with calculated figures.
Australia has decided to take certain steps to put cryptocurrencies into the same framework as fiat currency. Officials urged clients to realize that cryptocurrencies should be handled in every legal sense, much like Australian dollars. The entire “self-correction” process is set to go on for a month, where clients are expected to flock in by the dozens.
Mr. Chapman asked users why there was a difference in opinion on taxing crypto assets. In his words, people need to realize that the taxation of commodities will result in greater adoption and growth. These decisions come at a time when Australia has begun to double-check assets held by citizens and the taxes related to them.