The Australian Taxation Office (ATO) has alerted all the traders to report their correct earnings from the cryptocurrency sector. The ATO had warned several times to various Aussie crypto traders in the past few weeks but now the traders have crossed every limit and hence the time has come for strict regulations.
In Western nations, the guidelines are not that strict with respect to the cryptocurrency world when we compare from the Asian countries. But with the changing time laws are also getting stricter while dealing with cryptocurrency especially in Australia.
A Clear Picture of cryptocurrency profit:
If all the cryptocurrency traders announce their profit correctly to the tax department then such process will give a clear picture of the prevailing situation of the cryptocurrency market. But in reality, such a situation doesn’t exist and hence ATO needs to keep reminding the traders to declare their correct amount of profit. As per the recent law, those who have engaged in the transaction of more than $10,000 need to report the details accordingly. Further, ATO has related such issues with Aussie anti-money laundering and anti-terrorism finance so that many crypto users understand the need for reporting the same.
As per one of the statements reported in Australian Financial Review: “While there are no specific labels on the capital gains schedule or income tax return which can identify how many people have invested in cryptocurrency, we are still looking at lodgment activity this year to determine any significant impact of cryptocurrencies.”
According to laymen opinion, ATO is just trying to get better transparency for the sake of their action, or maybe they are reacting to respond the tax obligation queries effectively. ATO said that “We have observed through our ATO community channel and advice areas an increase in questions relating to tax obligations of cryptocurrency activity, which we see as a positive in people wanting to do the right thing in meeting their obligations.”
The ATO department has asked various traders to keep up-to-date information as per the prevailing taxation law. They need to keep every crypto transaction record properly which consists all the necessary information such as date, trading rate, the purpose of the transaction, parties associated with such transaction, an amount in Aussie dollars, etc.
However, such transparency will ultimately help crypto traders only as it will give them every piece of information needed.