Cryptocurrency data matching
CRYPTOCURRENCY: 2014–15 to 2019–20 financial years data matching program protocol
At a glanceThe term cryptocurrency is generally used to describe a digital asset in which encryption techniques are used to regulate the generation of additional units and verify transactions on a blockchain.
Cryptocurrencies can be bought or sold on an exchange platform using conventional money. Some popular digital currencies, like Bitcoin can be bought or sold for cash through special ATMs. Cryptocurrencies operate independently of central banks, central authorities or government. Cryptocurrency exchange platforms are generally not regulated.
The innovative and complex nature of cryptocurrencies can lead to a genuine lack of awareness of the tax obligations associated with these activities. Also, the pseudonymous nature of cryptocurrencies may make it attractive to those seeking to avoid their taxation obligations.
As interest in cryptocurrency has increased, the ATO has been working with partners to understand the tax implications and to plan an appropriate regulatory response, ensuring its approach is consistent with government policy and aligned to that of its partner agencies.
Currently the ATO has limited data on the level of investment, gains, losses, transactions made by Australian taxpayers and other information relating to cryptocurrency as there are limited obligations for taxpayers and third parties to provide this information.
The ATO is seeking to obtain data relating to cryptocurrency transactions from cryptocurrency designated service providers (DSP’s). The data obtained will be used to identify the buyers and sellers of crypto-assets and quantify the related transactions.
They will match the data provided by the DSP’s against ATO records to identify individuals who may not be meeting their registration, reporting, lodgement and/or payment obligations.