Global Tax Authorities Target Crypto Traders in Effort to Recover Unpaid Taxes
Summary:
The Australian Taxation Office (ATO) is reportedly gathering personal and transactional data from almost 1.2 million cryptocurrency exchange users, potentially to enforce crypto tax obligations. Australia is not the only country targeted for this action, with Canada and Turkey also working to secure unpaid taxes from digital asset gains. In the US, regulators are proposing a rise in long-term capital gains tax for high earners, alongside a 25% tax on unrealized profits for the ultra-wealthy.
The Australian Taxation Office (ATO) is reportedly gathering transaction and personal data from approximately 1.2 million users of cryptocurrency exchanges in a potential move to enforce tax obligations related to digital assets. According to a public notice cited by Reuters and released by the ATO earlier, the objective is to identify those who may not have fulfilled their tax obligations regarding cryptocurrency dealings. The ATO intends to access personal information such as dates of birth, social media profiles, telephone numbers, as well as transaction-specific details like wallet addresses, the types of coins transacted, and bank account information. Under Australian rules, cryptocurrencies are taxable commodities, unlike other overseas currencies, and traders must pay capital gains tax on profits made from the sale of these assets. This move coincides with a potentially highly profitable period for crypto investors, with Bitcoin (BTC) and Ether (ETH) increasing by 44% and 32% year-to-date (YTD), respectively. Likewise, the total market capitalization of other altcoins (excluding Bitcoin and Ether) has seen an over 27% YTD increase, as shown by TradingView data. The ATO statement acknowledges the complexity of the cryptocurrency realm, which may cause confusion regarding tax responsibilities. Notably, Australia is not the only nation looking to recover unpaid taxes on digital asset profit. The Canada Revenue Agency is currently carrying out over 400 cryptocurrency-related audits and probing numerous digital asset investors for uncollected crypto taxes, reports the National Post as of May 6. Additional audits follow an estimated $39.5 million of outstanding taxes that the Canadian tax body believes remain due for the tax year 2023-2024. Meanwhile, Turkish authorities are set to roll out cryptocurrency-specific legislation later this year, providing a legal framework for digital asset taxation, a significant move for a vibrant crypto economy like Turkey's. In contrast, US regulators are seeking to elevate the long-term capital gains tax rate to 44.6% intended only for those earning more than $1 million annually. President Biden’s Federal Budget also proposed a 25% tax on unrealized profits for the ultra-wealthy.
Published At
5/7/2024 1:51:39 PM
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