With Australia set to introduce new legislation that will empower authorities to monitor and regulate the activities of cryptocurrency traders, many analysts are anticipating that the country’s bitcoin investors will face a crackdown from the the country’s tax office.
Australia to Expand Regulatory Domain Over Cryptocurrency Traders
Australia’s new cryptocurrency regulations will see anti-money laundering legislation extended in order to greater encompass the challenges posed by virtual currencies. Analysts are expecting that the Australian Tax Office (ATO) will launch a crackdown on Australian cryptocurrency traders once the new rules are in effect.
Will Day, the ATO deputy commissioner, has stated that the extension of Australia’s anti-money laundering and counter-terrorism financing rules will result in “increased transparency” with regards to the operations of cryptocurrency traders. Cryptocurrency investors will face compulsory 100-point identification checks, with the ATO also planning to mobilize data-matching techniques in order to monitor the operations of traders under the new rules.
“The Anti-Money Laundering Counter-Terrorism Financing Act ensures that there is investor transparency through ‘know your client’ requirements. The increased transparency the law provides, combined with our data-matching techniques and a range of existing powers which address unexplained wealth, strengthen the ATO’s ability to tax cryptocurrency profits.”
ATO to Partner With OECD Anti-Tax-Avoidance Chief
The new legislation will see Australia’s financial intelligence agency, Austrac, extend its information-gathering jurisdiction to virtual currency exchanges. Australian cryptocurrency exchanges will also be mandated to report any cash transactions of over $10,000 AUD ($770 USD approximately).
It has been reported that the chief of the OECD’s global anti-tax-avoidance tax-force, commissioner Chris Jordan, will work closely with the ATO in monitoring the transnational flows of cryptocurrencies. Mr. Jordan will be tasked with discerning whether international virtual currencies may have tax implications, and may seek to foster joint operations involving the tax authorities of other nations.
Time Running Out for Crypto Tax Dodgers
Paul Drum of the National Tax Liaison Group has described the introduction of the new legislation as comprising “a watershed moment for the ATO and Austrac, enabling them to access and thoroughly review cryptocurrency exchange account data for the first time.”
Mr. Drum stated that “The effectiveness of the anonymity of Bitcoin and other cryptocurrencies is starting to fade. These coming changes mean that people shouldn’t assume they can hide forever behind blockchain technology, nor should they assume there are no tax consequences,” adding “Many people think of cryptocurrency trading as similar to having a bet at the casino, or backing Winx at the races. But there are usually tax consequences — and the stakes can be very high.”
Do you think that Australia’s tax authorities will launch a crackdown targeting cryptocurrency traders once the new legislation is in effect? Share your thoughts in the comments section below!