The Australian Taxation Office (ATO) is targeting around 1.2 million accounts linked to cryptocurrencies in order to tighten the noose on tax gaps.
According to Reuters, this a step marks an approach by the Australian government to “crack down on users who may not pay their taxes amid growing interest in digital tokens.”
ATO review of crypto transactions
The ATO is reviewing these 1.2 million crypto-related accounts for any reported and actual transaction inconsistencies. This includes reviewing personal data and detailed transaction records from various cryptocurrency exchanges.
Notably, as noted, the primary objective of this approach is to identify unreported transactions, whether they involve cryptocurrency exchanges or are used for the purchase of goods and services.
According to Reuters, cryptocurrencies are treated as assets and not foreign currencies in Australia. This classification means that any profit from the sale of these digital assets is subject to capital gains tax.
Additionally, reports indicate that more than 800,000 Australian taxpayers have transacted in digital assets over the past three years, with a significant increase seen in 2021.
This increase in crypto activity has prompted the Australian government to adopt a more structured regulatory approach, which, although comprehensive, is less strict than in other countries such as the United States.
Crypto Regulations in Australia
Although Australia has recently implemented regulations require cryptocurrency exchanges to obtain a financial services licensethe nation has expressed interest in the digital currency sector.
So far, major financial players, such as Van Eck Associates Corp. and BetaShares Holdings Pty, are prepares to launch cash exchange-traded funds (ETFs)the Australian Securities Exchange (ASX) is likely to approve these new offers soon.
In particular, reports from Bitcoinist indicate that ASX Ltd., which accounts for around 80% of all stock trading in Australia, is expected to approve the top spot in Bitcoin ETF by 2025.
Notably, the launch of spot Bitcoin ETFs in Australia will have a significant impact on the region’s retirement market, estimated at $2.3 trillion.
About 25% of the nation’s retirement assets are managed through self-directed retirement programs, allowing individuals to select their investments. These programs are expected to be the main buyers of the new spot-crypto funds.
Jamie Hannah, Deputy Head of Investments and Capital Markets at VanEck Australia noted that the combination of self-managed super funds, brokers, financial advisors and money platforms creates a large enough market to support the substantial growth of ETFs.
This development signals a bright future for digital asset investments in the Australian financial landscape.
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