Until now traders got away by not declaring their profits in the annual revenue reports in Australia. However, the latest diktat by the national tax office could well change all of that.
The Australian Taxation Office or the ATO has been at loggerheads with traders in cryptocurrency who are not complying with its request to report profits when declaring the annual revenues. This robs the apparent transparency of these transactions claims the Tax regulator. But the cryptocurrency stakeholders believe there is more than what meets the eye with this order by the government agency.
Many read this as a round-about method adopted by the government in order to push traders into the taxing system, by asking them to pay up part of their profits to the government.
New Rules indicate tax purposes
The latest directive from the ATO is for exchanges, traders and operators to list transactions which are priced above $10,000 and may be considered as being dubious or “suspicious” in its characteristic. According to a statement by the ATO,
“While there is no specific label on the capital gains schedule or income tax return to identify how many people have invested in cryptocurrency we are still looking at lodgment activity this year to determine any significant impact of cryptocurrencies.”
According to taxation experts, this move is loaded with opportunity for the government to bring cryptocurrency exchanges and traders into the tax bracket.
On the contrary, ATO is reactionary in its action. As per the ATO community discussions on forums, there is an increase in the number of tax obligations related to cryptocurrency activity has increased by and large in recent weeks. The positive side of these developments is that it also shows the intent of traders and community members’ intent in matching the obligations which are set by the government for them.
Current taxation rules for cryptocurrency state that – ATO’s laws on cryptocurrency profits need traders to keep records as well as dates of all of the cryptocurrency transactions. Additionally, operators will have to keep a focus on the amount used in the form of Aussie-fiat as well as state the purpose of use of such transactions. The records will have to be kept with regard to the transactions if other stakeholders are also part of such a transaction.
For the purist, such record keeping and maintenance of records is an anti-thesis in cryptocurrencies since the very tenets are based on decentralized ledger technology and most of the processes involved in generating such a cryptocurrency is always with respect to proof of work and in the newer age cryptos proof of space and proof of time.