Reports have been coming in from Australia, saying that quite a lot of cases were cited of tax evasion throughout the year of 2018, and even more in 2019. Just within the month of May, the Australian Tax Office reported seven major cases of avoiding state crypto tax laws, apparently numbering in the millions of US Dollars.
The reports were no surprise to the authorities as there have been numerous cases in the past as mentioned earlier, what was surprising, however, was the fact that corporations were also starting to be involved.
In the latest seven cases, one of them was an Australia company, who had avoided the most tax, and in fact, was supporting its customers to do the same by not providing their trading history and transaction frequency to the ASIC.
Australian crypto tax law
The Australian crypto tax laws are nothing new, as they’re modelled on the most common ones we can find all over the world. The Australian Investments and Securities Commission holds every local cryptocurrency exchange accountable for delivering information about their customers’ trading habits and transaction history.
Once the information is delivered the relative taxing agencies then calculate the due tax of an individual and then bill them.
In the past, the law was all about the citizens themselves writing down their transactions and capital gain on crypto trading, which, as many of you may guess, was a complete failure.
How are they doing it?
Australians are people who enjoy gaming quite a lot, and by gaming I mean wagering, placing bets and etc. Therefore, there are a plethora of online gaming platforms, especially popular for bitcoin wagering games in Australia. The crypto traders use these websites to either liquidate their crypto assets or simply use them as a repository for future small withdrawals.
They do this through registering on foreign crypto exchanges, that don’t have the obligation to let the authorities know about their customers’ trading history. Through this, they’re able to avoid the accounting, but in order to cash them out, they need to use a neutral or semi-neutral source, for which, the gaming websites are a perfect fit, because its so common for Aussies to withdraw money from them.
What is the ATO going to do?
The Australian Tax Office has announced that it is creating a special team for dealing with these types of crimes. The team will be called the J5 task force and will be comprised of five of the most influential countries in the crypto space, such as Australia, United Kingdom, United States, the Netherlands and Canada.
The three countries will pool their resources and prevent their citizens from avoiding crypto tax laws by registering and trading on foreign, unregulated cryptocurrency exchanges.