ATO crypto assets data-matching program
Hot on the heels of reports that a growing number of SMSFs are sustaining significant losses in crypto asset investments, the ATO has announced that it will be extending the current crypto asset data-matching program for the 2023-24 financial year through to the 2025-26 financial years.
Previously, the program covered periods all the way back to the 2014-15 financial year.
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Data elements to be collected
Under this data-matching program, data that will be collected about individuals include:
- name (given and surname);
- date of birth;
- addresses (residential/postal/other);
- ABN;
- email address, contact phone numbers, social media account;
- identifying verification document details;
- registration IP address;
- user ID;
- account type; and
- sign up date.
For non-individuals (such as SMSFs or other entities), data collected will consist of:
- business name;
- addresses (residential/postal/other);
- ABN;
- contact phone number;
- email address;
- registration IP address;
- user ID;
- account type (company, trust, super fund);
- and sign up date.
For both individuals and non-individuals, the crypto asset transaction details collected by the ATO will include:
- status of account (open/closed/suspended/lost etc);
- linked bank account details;
- wallet address associated with account;
- lost or stolen crypto amounts linked to accounts;
- unique identifier;
- transaction date and time;
- type of crypto asset;
- amount (in fiat and crypto);
- type of transfer;
- transfer description;
- total account balance; and
- IP address.
It is expected that data on approximately 700,000 to 1,200,000 individuals and entities will be collected each financial year under the data-matching program.
Data retention period
A point of difference with this particular program compared with other data-matching programs is that the data retention period will be 7 years from the receipt of the final instalment of verified data files from data providers, as opposed to the usual 5 years.
The ATO justifies this longer retention period by pointing to the need to conduct longer-term trend analysis and risk profiling of the crypto market as well as individuals retaining crypto assets over many years before disposing of them and triggering a CGT event.
Use of data
According to the ATO, the crypto asset data-matching program will allow it to identify and address multiple tax risks including:
- omitted or incorrect reporting of CGT – crypto assets acquired as an investment will most likely be subject to capital gain on disposal. Disposal is deemed to have occurred on selling crypto assets for fiat currency, exchanging one crypto asset for another, gifting crypto assets, trading crypto assets, or using crypto assets to pay for goods or services.
- omitted or incorrect reporting of income – in certain situations crypto transactions can also give rise to ordinary income. Taxpayers who trade crypto assets or businesses that accept crypto assets as payment have obligations to report the income generated in their tax returns.
- omitted or incorrect reporting of GST – in certain situations crypto transactions can give rise to GST. GST registered businesses that accept crypto assets as payment must account for GST on the supplies made and declare these in their business activity statement. Crypto intermediaries that make supplies which may be subject to GST will be required to register for GST in some cases.
- omitted or incorrect reporting of FBT – when employees receive crypto assets as remuneration under a salary sacrifice arrangement, the payment of the crypto asset is a fringe benefit.
The ATO will also be using the data obtained from the program to promote voluntary compliance and educate individuals and businesses that may be failing to meet their registration or lodgment obligations.
In addition, insights from the data will also be used to develop compliance profiles of individuals and businesses and initiate compliance action as appropriate.
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.