Australian tax agents have set out to close a gap they say costs the state several billion dollars. Taxpayers who file various work-related claims and investment property deductions or declare income from sharing economy platforms such as Uber and Airbnb may be asked for explanations and receipts. Investors and traders earning income from cryptocurrencies are also among the targeted.
Crypto Investors Advised to Keep Detailed Records of All Transactions
The revenue service has started contacting hundreds of thousands of Australians via mail and email to remind them of the tax obligations that come with cryptocurrency trading. A spokesman for the Australian Taxation Office (ATO) told News.com.au that people who sold cryptocurrency during the 2017/18 financial year may be asked to review their tax returns. Those who fail to correct any established discrepancies can be audited and risk penalties. The official stated:
Over the next two months we expect to contact as many as 350,000 individuals who have traded in cryptocurrency in the last few years.
Taxpayers who only held crypto but didn’t trade will be updated about the information they are required to gather. Investors should keep detailed records including receipts of purchase or transfer of cryptocurrency, exchange and digital wallet records, the date and the value of each transaction in Australian dollars at the time it took place. They should also be able to explain the purpose of each transaction and identify other involved parties.
Financial gains from trading and exchanging crypto as well as from converting it into local or foreign fiat is subject to capital gains tax in Australia, where cryptocurrency is considered a property-like asset for tax purposes.