The Australian Taxation Office will now monitor the digital currency to ensure that all the people who hold cryptocurrencies are paying the right amount of tax. ATO has already approached the designated service providers for cryptocurrencies to collect bulk data about the cryptocurrency holders. Now, this data will be matched with the data that they have provided while filing the taxes.
This third party data will help in identifying the taxpayers who are not disclosing complete information about their income in taxes. Most of the people mention only some of their digital currencies while filing the taxes to reduce the tax amount and now ATO is planning to get a hold on them.
From now onwards this procedure will be continued. ATO will keep on collecting data from DSP’s and match them with the details provided by digital currency holders. According to ATO, there are 500,000 to one million Australians who have invested in cryptocurrencies. Most of the people are using the blockchain and cryptocurrencies as a medium to send their money offshore or hide the black money.
ATO is collaborating with the Australian Security and Investment Commission (ASIC) and Australian Transaction Reports and Analysis Center (Austrac) in order to monitor the cryptocurrency transfers.
As there are times when the data matching program of government went wrong, ATO has stated that it will give an opportunity for the individuals to verify the information before any action is taken. This verification is applicable for the individuals who are approached by ATO.
Austrac has got approval to monitor the digital currencies back in 2017 to avoid money laundering in the form of cryptocurrencies. All the cryptocurrency holders have to enroll themselves with Austrac before making any kind of transactions. Collaborating with Austrac in the program will help ATO a lot.