Cryptocurrencies and other digital assets are becoming increasingly relevant among Australian consumers. As a result, more investors and traders are jumping on the crypto bandwagon lately. Therefore, the Australian Taxation Office (ATO) is precisely scrutinizing crypto as an area of concern. The authority aims at cracking down on the mistakes of the public in the crypto space.
The Australian Taxation Office has announced four key areas for the Tax Time of 2022. These include record-keeping, work-related expenses, rental property deductions, and capital gains from cryptocurrencies, shares, and property. Nonetheless, this announcement indicates that the tax authority has singled out cryptocurrencies.
Australian Taxation Office Increases Crypto Scrutiny in the Country
By placing crypto on the list of key focused areas, the Australian Taxation Office has tried to bring crypto into the country’s strong tax radar. Also, the authority aims at increasing the scrutinization of deductions and income of crypto consumers. Australia has a profound system to facilitate its taxpayers, and the country intends to do the same for its crypto community.
The Assistant Commissioner of the ATO, Tim Loh has stated that they are focusing on those areas where people make mistakes. He accepted that crypto is gaining popularity in the country as an investment asset. Also, Australia is expecting to observe a sharp increase in reported crypto gains and losses for taxation purposes in 2022.
The taxation authority believes that more people are buying, selling, trading, and investing in cryptocurrencies. However, now the aim is to make people more aware of their tax obligations. The ATO has asked people to keep a record of any capital gain or loss from the use of cryptocurrencies or non-fungible tokens. This capital gain or loss is the difference between the initial cost of the asset and its selling price. A similar rule is applicable to shares and property.
In addition to this, the ATO has also warned of legal action against anyone who toys with the records or is unable to justify their claims. The authority will focus on work-related expenses in correlation with work-from-home practices. Lastly, the authority has advised investors to carefully enter their rental income for taxation.
These steps from the ATO reflect Australia’s priority of making its tax network more inclusive. It might prove to be a positive development for the country’s crypto community, as the ATO is considering crypto among mainstream financial products. This might encourage more Australians to dive into the crypto realm.