The problems of cryptocurrency taxation are persistent in most parts of the world. Either there is no clear taxation framework present, or people tend will misunderstand the existing taxation norm. The latter is the case in Australia, where the Australian Tax Office (ATO) has said that tax return data from crypto investors themselves cannot be reliable. There are many reasons for it, but the most important reason, according to the ATO, is that investors only consider taxation rates when their digital assets are converted to Australian dollars. However, that is not what the law is, and the mismatching accounts are causing many problems for the ATO. At the same time, the ATO believes that most people make this mistake due to unawareness and not malicious intents.
Tax return rates in Australia are one of the best in the world. Nearly 50% of the tax returns filed do not need any external intervention – be it from investors or small businesses. ATO commissioner Chris Jordan feels that this is a big problem for the overall crypto economy in Australia, as defaulting in large numbers will lead the government to take action against it.
The ATO is now using improved data matching systems by taking information from cryptocurrency exchanges to make sure that people are paying their taxes correctly. In Australia, cryptocurrency is a growing economy that recently got political backing from some members of the Senate. How the ATO deals with taxation problems will give a model to other countries.