According to the news.com.au report, hundreds of thousands of Australian citizens are set to receive a stern warning from the Australian Taxation Office in the coming weeks as tax authorities take on crypto traders. The tax agency is in the process of contacting up to 350,000 individuals via emails and letters to inform them of their tax obligations when they trade in cryptocurrencies.
Financial gains made from trading crypto are subjected to capital gains tax.
Cryptocurrencies are considered to be a form of property and are treated as assets for capital gains tax purposes in Australia. Any gains made from the trading of cryptocurrencies such as bitcoin are subjected to capital gains tax in the country and must be reported with the Australian Taxation Office.
ATO to identify those who misreported their tax returns.
According to the report, the tax office is utilizing its Data Matching Protocol for cryptocurrencies, which allows it to cross-check data it has in individuals with the data provided by crypto exchanges. Using this protocol, the tax agency will identify people who may have misreported on previous tax returns. An ATO spokesperson said that under this program, they obtain cryptocurrency transaction data from exchanges on taxpayers who have bought and sold cryptocurrency.