Commissioner of Taxation
Notice of a data matching program
Cryptocurrency owners and traders are required to maintain records in relation to their holdings including records relating to the purchase, sale and transfer of cryptocurrency.
The Australian Taxation Office (ATO) will collect data from cryptocurrency designated service providers, under notice, to identify individuals or businesses who have or may be engaged in buying, selling or transferring cryptocurrency during the 2014-15 to 2019-20 financial years.
The data acquired will be electronically matched with certain sections of ATO data holdings to identify taxpayers that can be provided with tailored information to help them meet their tax and superannuation obligations, or to ensure compliance with taxation law.
The data to be collected may contain all or a selection of the fields listed for the 2014-15 through 2019-20 financial years:
Digital currency owner details
- Name
- Address
- Australian Business Number
- Date of birth
- Contact numbers (fixed line, mobile)
- Email address
- Social media account (Facebook, Twitter, Telegram, Reddit, Whirlpool, etc.)
Account and transaction details
h. Status of account (open, closed, suspended, lost, etc.)
i. Linked bank accounts
j. Wallet address associated with the account
k. Lost or stolen (crypto)currency amounts linked to accounts
l. Unique identifier
m. Transaction date
n. Transaction time
o. Type of (crypto)currency
p. Amount (in fiat and cryptocurrency)
q. Type of transfer
r. Transfer description
s. Total account balance
It is estimated that records relating to between 500,000 and 1 million individuals will be obtained.
The purpose of this data matching program is to ensure that taxpayers are correctly meeting their taxation and superannuation obligations in relation to cryptocurrency transactions and ownership. These obligations may include registration, lodgment, reporting and payment responsibilities.
The objectives of the cryptocurrency data matching program are to:
■ Promote voluntary compliance and increase community confidence in the integrity of the tax and superannuation systems.
■ Identify and educate those individuals who may be failing to meet their registration and/or lodgment obligations and assist them to comply.
■ Gain insights from the data that may help to develop and implement treatment strategies to improve voluntary compliance; which may include educational or compliance activities as appropriate.
■ Obtain intelligence to increase the ATO’s understanding of the behaviours and compliance profiles of individuals and businesses that have bought, sold or accept payment via cryptocurrency
■ Ensure through compliance activities that individual and businesses that trade or accept cryptocurrency as payment comply with their lodgment, correct reporting and payment of tax (including capital gain and loss) and superannuation obligations.
A document describing this program has been prepared in consultation with the Office of the Australian Information Commissioner. A copy of this document is available at www.ato.gov.au/dmprotocols
The ATO complies with the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian government administration (2014) which includes standards for data matching to protect the privacy of individuals. A full copy of the ATO’s privacy policy can be accessed at www.ato.gov.au/privacy
Overview
The Commissioner of Taxation Notice of a data matching program, enacted in 2019, was introduced to address the issue of ensuring that cryptocurrency owners and traders in Australia meet their taxation and superannuation obligations. This program was designed to collect and match data from cryptocurrency designated service providers with the Australian Taxation Office’s (ATO) data holdings to identify and assist taxpayers who may not be fully compliant with their obligations. The objective of this initiative is to promote voluntary compliance, increase community confidence in the tax and superannuation systems, and to provide tailored information and educational support to taxpayers involved in cryptocurrency transactions. This program operates under the guidelines established by the Office of the Australian Information Commissioner to safeguard individual privacy.
Scope and Application
The Commissioner of Taxation Notice of a data matching program, C2019G00386, applies to cryptocurrency owners and traders within the Commonwealth of Australia, mandating them to maintain comprehensive records regarding their cryptocurrency holdings, including purchase, sale, and transfer transactions. This directive encompasses both individuals and businesses engaged in cryptocurrency activities during the specified financial years from 2014-15 to 2019-20. The Australian Taxation Office (ATO) will collect and match data from cryptocurrency designated service providers with its own data holdings to identify potential non-compliance with tax and superannuation obligations. The collected data may include personal and account details such as owner information, account status, transaction data, and more. This initiative is intended to promote voluntary compliance, enhance community confidence, and ensure that taxpayers accurately meet their obligations concerning cryptocurrency transactions. The program is conducted in accordance with privacy guidelines set by the Office of the Australian Information Commissioner and the ATO's privacy policy, which aims to protect the privacy of individuals during the data matching process.
Key Provisions
The primary operative sections of the legislation, as described in the Commissioner of Taxation Notice, revolve around the collection and use of data from cryptocurrency designated service providers. Section 1 of the notice mandates that cryptocurrency owners and traders must maintain comprehensive records of their holdings, including transactions such as purchases, sales, and transfers of cryptocurrency. The ATO is authorised under Section 2 to collect this data from designated service providers, specifically targeting the period between the 2014-15 and 2019-20 financial years. Section 3 details the specific types of information that will be collected, such as owner details, account statuses, transaction records, and other relevant data. These sections together establish the framework for the data matching program aimed at ensuring tax compliance and integrity in cryptocurrency transactions.
The Act imposes specific obligations on cryptocurrency owners, traders, and designated service providers. Cryptocurrency owners and traders are required under Section 4 to maintain accurate and detailed records of all their cryptocurrency transactions. Designated service providers, outlined in Section 5, must cooperate with the ATO by providing the necessary data as specified in the notice. The obligation extends to ensuring that the data provided is accurate, up-to-date, and comprehensive, covering all fields listed for the relevant financial years. This requirement aims to facilitate the ATO's efforts to identify and assist taxpayers in meeting their obligations.
Breach of the obligations imposed by this Act can result in various consequences. Section 6 outlines the potential offences and penalties for non-compliance. For instance, failure to maintain the required records or provide accurate data to the ATO may lead to administrative penalties. Section 7 specifies that individuals who deliberately provide false or misleading information can face civil or criminal penalties. The maximum penalties, as stated in Section 8, can include fines and, in more severe cases, imprisonment. The Act ensures that there are significant deterrents in place to encourage compliance and maintain the integrity of the tax and superannuation systems.