Thousands of crypto investors have received letters from the Australian Tax Office (ATO) regarding undeclared cryptocurrency gains.
In June 2020, the ATO began sending out letters to some 350,000 cryptocurrency investors. It first made the announcement to send out letters back in March as reported by News.com.au.
It obtained information on these investors through a new government initiative launched in April 2019 which requires crypto exchanges to share data with the government.
Received this letter from the ATO?
Cryptocurrencies are considered an asset just like Stocks or Gold in Australia and result in capital gains tax upon disposal. However, most crypto investors are not aware of the tax liabilities that arise from trading on crypto exchanges so this is the first step by the ATO to "educate" investors.
"...so our campaign is designed to help raise awareness and give people the opportunity to fix any mistakes. For other taxpayers where we can see they hold cryptocurrency, but may not have sold or traded any during the (financial) year, we will be writing to them to remind them of their tax obligations and the records they should be keep" said an ATO spokesman.
Of course, reddit has also been ablaze with crypto traders scrambling to get a handle on crypto taxes:
If you are one of the recipients of this letter then you will need to respond to it before the given due date - usually 1 month from date of receipt.
Australian exchanges partner with Koinly for tax reporting
Given the complexity of cryptocurrency taxes, a number of leading Australian cryptocurrency exchanges - Coinjar, Cointree and Swyftx - have partnered with the crypto tax platform Koinly to help their users with their tax obligations. You can now sign up for a free Koinly account to estimate your capital gains.
Read full announcement.