[2018-03-05] Australia’s Tax Office Targets Bitcoin Investors

[nickbelski]

The ATO (Australian Tax Office) is tightening up in attempts to close loopholes in investments in cryptocurrencies like bitcoin.

Cryptocurrency will be one area going under close attention, alongside work expenses and incorrect claims.

Mark Chapman, H&R Block’s director of tax communications told reporters that these were areas that had seen “systemic abuse”, costing the budget over $2.5b a year.

The authorities state that they will use 100-point identification checks to implement data-matching techniques in order to investigate cryptocurrency investors. The subject is a “murky area”, with many unaware of current regulations. Chapman said:

“A lot of people simply aren’t aware of their tax obligations — cryptocurrency is a wild west area with regards to tax — but it’s essential to be aware that there are potential tax obligations surrounding capital gains and income tax, depending on if you are investing or trading”

The ATO provided guidance regarding the issue earlier this year. The document outlines that whilst cryptocurrency (specifically Bitcoin) is not seen as money or foreign currency, it is viewed as an asset subject to capital gains tax.

There has been a range of cryptocurrency developments in Australia recently. Earlier this month the bank CBA was among those who banned the purchase of cryptocurrencies with credit cards. However, the news has not all been negative – in January Brisbane airport became the world’s first to accept cryptocurrencies for retail and services.

Australia might not be alone in moving to tighten control of cryptocurrency taxes. A recent report found that 0.04% of US cryptocurrency users are paying taxes. Of the 250,000 Americans studied over 57% admitted knowing taxes were applicable to their crypto transactions.

With statistics like these beginning to appear, we may see authorities around the world look to tighten tax control.

Source: https://www.ccn.com/bitcoin-investors-to-be-targeted-by-australian-tax-office/

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[1Referee]

The main problem with people is their unfunded faith in the "anonymous" nature of crypto, which makes them avoid paying taxes. It's a delusional form of self overesitmation that will cost people badly at some point. It's impossible to avoid paying taxes when you're making use of centralized services falling under the governmental regulations that are in place. It's clear already that if you aren't paying your due taxes, the government will come and get it from you, and perhaps not in a friendly manner. That's why I started recently with paying taxes as well, and where I initially felt bad, it feels kinda good right now. I can keep trading without having anything to worry about, because I felt the pressure building up already in the way that governments are very close to busting the shit out of people on centralized services.

[Basmic]

I guess you're right. You've secured yourself from tax claims. But such actions are contrary to the idea of bitcoin. It's an Autonomous system. Anonymity is a myth. But the community should not follow the path of legalization. We should not ask the government for permission to use the people's currency. We must do everything to ensure that bitcoin lives its life. The main disadvantage of bitcoin is the need to make purchases to change it to Fiat. I believe that this problem will be eliminated and the obligation to pay taxes will be eliminated.

[1Referee]

I guess you're right. You've secured yourself from tax claims. But such actions are contrary to the idea of bitcoin. It's an Autonomous system. Anonymity is a myth. But the community should not follow the path of legalization. We should not ask the government for permission to use the people's currency. We must do everything to ensure that bitcoin lives its life. The main disadvantage of bitcoin is the need to make purchases to change it to Fiat. I believe that this problem will be eliminated and the obligation to pay taxes will be eliminated.

People are a bunch of hypocrites. If you want to follow the path that isn't directly subject to the regulations affecting the centralized part of our market, then don't use exchanges, don't use online wallet services, don't use casinos, etc. No one forces you to use them, it's your own choice at the end of the day, so it's not against the idea of Bitcoin at all. In other words, to distance yourself from potential tax claims, your coins should never hit any service or platform where you are not 100% the sole owner of your private keys. If you make use of centralized services anyway, then accept the fact that paying taxes is mandatory. If it isn't out of free will, you'll be forced to pay taxes at a later point.

[superjeyy]

I guess you're right. You've secured yourself from tax claims. But such actions are contrary to the idea of bitcoin. It's an Autonomous system. Anonymity is a myth. But the community should not follow the path of legalization. We should not ask the government for permission to use the people's currency. We must do everything to ensure that bitcoin lives its life. The main disadvantage of bitcoin is the need to make purchases to change it to Fiat. I believe that this problem will be eliminated and the obligation to pay taxes will be eliminated.

People are a bunch of hypocrites. If you want to follow the path that isn't directly subject to the regulations affecting the centralized part of our market, then don't use exchanges, don't use online wallet services, don't use casinos, etc. No one forces you to use them, it's your own choice at the end of the day, so it's not against the idea of Bitcoin at all. In other words, to distance yourself from potential tax claims, your coins should never hit any service or platform where you are not 100% the sole owner of your private keys. If you make use of centralized services anyway, then accept the fact that paying taxes is mandatory. If it isn't out of free will, you'll be forced to pay taxes at a later point.

Everything that 1Referee said is on point. At the end of the day, if you're a citizen of a country that is adopting to Bitcoin, then there is definitely rules and regulations that you have to abide, despite it going against the true structure and concept of Bitcoin. Compromises are made when it comes to Bitcoin adoption and as a citizen of that country, you have a responsibility to fulfill; one of it is paying your taxes and using services as mentioned above. You shouldn't disregard that responsibility of yours just because you want Bitcoin to live its life. Be responsible but be vigilant.

[Domenc]

Bitcoin and its uses have been same, since its invention basically to provide anonymous transactions and trading over the internet using various crypto currencies. But the recent hype coming from last Q4 has generated a mass volume of new users due to which the loopholes in the system regarding tax invasion is seen clearly.

Australia might not be alone in moving to tighten control of cryptocurrency taxes. A recent report found that 0.04% of US cryptocurrency users are paying taxes. Of the 250,000 Americans studied over 57% admitted knowing taxes were applicable to their crypto transactions.

This clearly indicates not only Australia but many more countries are worried about tax invasion in the form of crypto currency. One clearly knows that it is hard to track transactions but still proper measures and rules can be implemented to help the system.

[darkangel11]

This clearly indicates not only Australia but many more countries are worried about tax invasion in the form of crypto currency. One clearly knows that it is hard to track transactions but still proper measures and rules can be implemented to help the system.

Of course they are afraid because it hinders their ability to control the masses and steal from them. Once people have their own money and can trade with one another it's like improved cash. When I ask a neighbor to mow my lawn and pay him $100 in cash technically he should report it and pat tax, but it never happens. With cryptocurrencies I can pay him without living home or my workplace and the result is the same. It's simply more convenient and it doesn't force me to use government tokens, I have my own.

[knightbrown]

this is easier money too for tax service, lol

[orions.belt19]

I guess you're right. You've secured yourself from tax claims. But such actions are contrary to the idea of bitcoin. It's an Autonomous system. Anonymity is a myth. But the community should not follow the path of legalization. We should not ask the government for permission to use the people's currency. We must do everything to ensure that bitcoin lives its life. The main disadvantage of bitcoin is the need to make purchases to change it to Fiat. I believe that this problem will be eliminated and the obligation to pay taxes will be eliminated.

People are a bunch of hypocrites. If you want to follow the path that isn't directly subject to the regulations affecting the centralized part of our market, then don't use exchanges, don't use online wallet services, don't use casinos, etc. No one forces you to use them, it's your own choice at the end of the day, so it's not against the idea of Bitcoin at all. In other words, to distance yourself from potential tax claims, your coins should never hit any service or platform where you are not 100% the sole owner of your private keys. If you make use of centralized services anyway, then accept the fact that paying taxes is mandatory. If it isn't out of free will, you'll be forced to pay taxes at a later point.

I guess that even those who want to go anonymous cannot avoid the fact that we are surrounded by authorities that would eventually step in with attempts to have some control. Even though bitcoin is decentralized in itself, the use of exchanges and wallets will eventually lead to third party control. Implications of tax may not be avoided but a user still has in their capacity the power to avoid this. The use of regulated exchanges and wallets or declaration of income should be avoided if they would want to get away from taxes.

[gogrowglow]

This might happen also in other countries because government would want a lion share in the form of taxes.  Right now some countries do not have a way in getting taxes from bitcoin users.  They do not have control over it,  but they will eventually  exert efforts to find a way, but for me I hope  they wont find a way in the very near future or maybe never gain control over CRYPTOCURRENCY.