As of the 3rd of April 2018, AUSTRAC (the government body in Australia which keeps a tab on money laundering and terror related activities) has placed new rules governing cryptocurrency transactions to provide greater transparency for regulators. Now transactions involving cryptocurrency will need to be signed up and logged onto a new Digital Currency Exchange Register. AUSTRAC requires that dealings above $10,000 be reported as per pre-existing rules for cash transactions and bank transfers.
The new register and rules mean that individuals involved in cryptocurrency transactions will need to better comprehend the impact this has on their tax obligations, as gaps and loopholes are increasingly being sought out by government agencies to be plugged and closed out.
This move is likely to increase ATO’s attention on cryptocurrency transactions and people may be expected to describe not only the source and nature of transactions but highlight whether they will have adhered to ATO rules during those transactions as well.
Coming off the heels of many fervent warnings by the ATO to taxpayers, encouraging them to review cryptocurrency guidance ahead of 2018 tax deadlines, the ATO has advised that they will take strong action to crack down on individuals who deliberately attempt to avoid their tax obligations.
Placing emphasis on SMSF dealings in cryptocurrency, the ATO has strongly mentioned the need for detailed record-keeping as this will be vital during auditing and compliance processes.
Disclaimer: This blog is not an advice of personal or general nature; specialised advice may be sought if deemed necessary by reader.