People may have been using cryptocurrencies to evade taxes all over the world. Whether or not anyone will ever uncover evidence of people doing so remains subject to speculation. In Australia, the Australian Taxation Office wants to find out how people are using cryptocurrencies. A new task force has been created to investigate any reports of potential tax evasion using Bitcoin and similar currencies. In a way, this move is positive for the future of cryptocurrency.
ATO Wants to Address Cryptocurrency-related Tax Evasion
We may never know whether or not anyone has ever used Bitcoin or other cryptocurrencies to launder money. Even though public blockchains are anything but anonymous these days, a lot of governments have neglected to embrace cryptocurrency as a form of money. In doing so, they inadvertently allowed this medium to thrive without regulation or oversight. It is only normal that some people around the world have attempted to see how far they can push the envelope when it comes to laundering money or evading taxes.
Whether or not there will ever be any evidence of individuals doing so remains unknown. In hindsight, it is certainly possible people made mistakes, but we may never know the whole truth. Looking toward the future, the Australian Taxation Office wants to prevent people from (further) using cryptocurrencies to evade taxes. As a result, it announced the formation of a new expert task force to track down cryptocurrency users across the country and check their tax reports.
Furthermore, the new task force will reportedly collaborate with tax officials to explore practical issues involving digital currencies. It is a rather vague statement, although this could hint at a new way of taxing Bitcoin and other cryptocurrencies across Australia in the future. Right now, there is growing concern over cryptocurrency users submitting inaccurate or misleading information about their income and capital gains. It is evident the available educational information regarding this topic may need to be revamped at some point.
Any country where cryptocurrency is subject to taxation guidelines may need to clarify the rules moving forward. After all, there is a distinction between capital gains tax and income tax. For a lot of people, the difference is unclear, which may cause them to take erratic action to evade said taxes. Australian regulators have been working on cryptocurrency taxation guidelines for some time now, and it seems they are ready to take things to the next level in the coming years.
As of right now, the Australian Taxation Office considers Bitcoin to be neither money nor a foreign currency. That makes this whole situation even more confusing for the average cryptocurrency user, which is only understandable. Tax specialists’ clients have a lot of questions regarding their liabilities from transactions involving cryptocurrency. After all, these currencies are subject to serious volatility. If the value of such a transaction changes following the deal, there needs to be an adjustment in one’s reported income and capital gains.
At the same time, the majority of tax evasion still occurs through the legacy banking system. Cryptocurrencies may not be popular for this particular purpose, as it is difficult to move massive amounts of money through Bitcoin or other currencies. If banks, cryptocurrency experts, and tax authorities work together, all of these concerns may be laid to rest once and for all. For now, we will have to wait and see how the situation evolves in Australia.