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Financial Expert Thomas Mousa Says Crypto Currency On The ATOs Radar This Tax Time
ATO To Focus On Crypto Transactions During ‘Tax Time’
Taxpayers who have bought, sold or transferred cryptocurrency will be subject to greater ATO scrutiny ahead of tax time this year say leading Australian financial expert.
The ATO can identify individuals or businesses who have or may be engaged in buying, selling or transferring cryptocurrency during the 2014–15 to 2019–20 financial years using a new reporting technology.
A data-matching program will give the ATO visibility over whether up to 1 million taxpayers are correctly meeting their taxation and superannuation obligations in relation to cryptocurrency transactions and ownership.
Financial expert, Thomas Mousa, partner and director of TLK Partners in Sydney says “the ATO will give taxpayers 28 days to clarify any information that has been obtained from data providers connected to the new reporting system before any compliance action is taken.”
ATO deputy commissioner Will Day said, “We want to help taxpayers to get it right and ensure they are paying the correct amount of tax.”
“Where people find that they have made an error or omission in their tax return, they should contact the ATO as soon as possible. Penalties may be significantly reduced in circumstances where we are contacted prior to an audit.”
The ATO has adjusted its systems in recent years to deal correctly with the burgeoning Cryptocurrencies, and the latest tool in their arsenal is a data-matching program marking a renewed effort from the agency to stamp out non-compliance ahead of tax time 2019.
Mousa says, “It is understood the ATO will be working with other regulators, in particular, the Australian Transaction Reports and Analysis Centre (AUSTRAC) and ASIC, as well as other international regulators as part of the Joint Chiefs of Global Tax Enforcement (J5), to investigate cryptocurrency-related tax evasion and money laundering.”
“The ATO will be targeting up to 1 million taxpayers participating in Cryptocurrency, and in a country with a population of 25 million, it is quite astounding the number of cryptocurrency users has grown to already,” Mousa said.
“Clients must be made aware of the ATO’s no-nonsense stance on this matter,” Mousa explained, “it is vital that advisers raise the message with their clients early on, ahead of any action from the Tax Office.”
Part of the issue for clients is what is called a “supernova moment”. A great example of this is the rise of bitcoin in 2017. Conversely, Bitcoins demise from almost $30,000 to about $7,000. During these periods of the dramatic rise and falls, some taxpayers may have undeclared gains from say 2015 – 2017 and other with substantial losses.
The big issue that vests with taxpayers that may have realised gains in which they have a tax obligation that they haven’t declared for some reason or another and they won’t have any money to pay the bill because they’ve got losses after the event in a different financial year.
“If they left it in or traded one crypto for another crypto unless they actually cashed out and banked the money, they might have ridden the market down and may have trouble paying any tax bill,” Mousa explained.
“Cryptocurrency advice is available to all clients of TLK Partners, and it is fundamentally important that advice is sought before this tax time to avoid heavy penalties,” Mousa concluded.
TLK Partners Wealth Management Companies Kingsgrove, Beverly Hills | Tax Accountant & Agent | Property Advisers are financial management, retirement planning and wealth advisers serving enterprises and private individuals who hope to take care of their future through sound financial management. Visit their website or contact them at (02) 8090 4324 for an appointment to discuss your financial management and investment needs.
This material is of a general nature only, it does not take into consideration your financial circumstances, needs or objectives. Before making any decision based on this content, you should assess your own circumstances, seek professional advice or contact our office to be directed to the appropriate professional. Whilst all care has been taken in presenting the material neither TLK Partners or its associated entities guarantee that the material is free of error and, the information may have changed since being published.
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The information contained in this article is based on the authors’ opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.
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