On 30 April 2019 the Australian Taxation Office (ATO) released information on its data matching program for crypto-asset holders. Cryptocurrency exchanges and ATMs identified as Designated Service Providers (DSPs) will be required to provide information on transactions carried out from the 2014/2015 financial year to the 2019/2020 financial year. The definition of DSPs includes all businesses operating in Australia that provide ‘cryptocurrency designated services for individuals’ and is not limited to exchanges alone.
The ATO plans to match the data received from the DSPs to tax return records filed to ensure that individuals and businesses have been accurately reporting their tax obligations.
Information to be collected
The ATO plans to collect data between March 2019 – July 2020 and have asked for permission from the Privacy Commissioner to store data for up to 7 years.
One of the most concerning aspects of the new program is that the ATO is entitled to share data collected from DSPs to other agencies to the extent that it related to taxpayer information. Information may be shared to:
- The State Revenue Office;
- Centrelink and other social welfare, health and safety programs;
- Superannuation funds, corporation and financial market operators;
- Compensation payment providers;
- Law enforcement agencies; and
- Policy analysis agencies to determine the effectiveness of the program.
The ATO will request the following information on roughly 500,000 – 1 million individuals:
- Digital currency owner details
- Name
- Address
- Australian Business Number
- Date of birth
- Phone number
- Email address
- Social media account (Facebook, Twitter, Telegram, Reddit, Whirlpool, etc.)
- Bank account details
- Cryptocurrency amounts held;
- Linked wallet account details;
- Transaction times, dates, frequency and amounts; and
- Total account balances.
What does this mean for you?
If you have purchased or sold cryptocurrencies in the last five years, and particularly if you have transacted in amounts exceeding $10,000 AUD, you should review your tax returns to ensure that information provided to the ATO accurately reflects the transactions undertaken.
If the ATO has identified a discrepancy in data relating to you, they will first reach out to you by phone, email or post. If contacted by the ATO you have 28 days to clarify the discrepancy with them.
For any questions in relation to your potential tax liabilities from cryptocurrency trading, or to have a confidential discussion about your privacy rights in relation to the information to be disclosed by the ATO please contact Hana Lee at [email protected].
