Australia seeks client data from crypto exchanges in tax crackdown

SYDNEY – Australia’s tax office has sought from crypto currency exchanges the personal data and transaction details of up to 1.2 million accounts as it looks to crack down on users who may be failing to pay their taxes amid a rising interest in digital tokens.

In a notice issued last month, the Australian Taxation Office (ATO) said the data will help identify traders who had failed to report the exchange of crypto assets, or when they sold it for currency and used it to pay for goods or services.

The crypto industry’s complex nature can lead to a genuine lack of awareness of the tax obligations, the ATO said.

“Also, the ability to purchase crypto assets using false information may make them attractive to those seeking to avoid their tax obligations”, it said.

Personal data including the date of birth, phone numbers, social media accounts, and transaction details like bank accounts, wallet addresses, and the coin type will be sought.

Australia treats digital currencies as assets for tax purposes, and not as foreign currency. This means investors would have to pay capital gains tax on profit from selling crypto assets and when they trade digital assets.

Crypto assets have been gaining in popularity in Australia. A treasury report released in 2022 said more than 800,000 Australian taxpayers had transacted in digital assets in the last three years, with a 63% rise in 2021. — Reuters