Gazette notice: Commissioner of Taxation – Notice of a crypto asset data-matching program - 26 April 2024
The Australian Taxation Office (ATO) will acquire account identification and transaction data from crypto designated service providers for the 2023-24 financial year through to the 2025-26 financial year inclusively.
The data items include:
- client identification details (names, addresses, date of birth, phone numbers, social media account and email addresses)
- transaction details (bank account details, wallet addresses, transaction dates, transaction time, transaction type, deposits, withdrawals, transaction quantities and coin type).
We estimate that records relating to approximately 700,000 to 1,200,000 individuals and entities will be obtained each financial year.
The data will be acquired and matched to ATO systems to identify and treat clients who failed to report a disposal of crypto assets in their income tax return. The matching process strengthens our ability to develop tailored treatments for clients who may not be meeting their obligations. These may include registration, lodgment, reporting and payment obligations.
The objectives of this program are to:
- promote voluntary compliance by communicating how we use external data with our own to help encourage taxpayers to comply with their tax and superannuation obligations.
- identify and educate those individuals and businesses that 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; this may include educational or compliance activities as appropriate.
- gain insights from the data to increase our understanding of the behaviours and compliance profiles of individuals and businesses that have bought, sold, or accepted payment via crypto assets.
- help ensure individuals and businesses that trade or accept crypto assets as payment are fulfilling their tax lodgment, reporting and payment obligations.
A document describing this program is available at ato.gov.au/Data-matching protocols.
This program follows the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian Government administration (2014) (the guidelines). The guidelines include standards for the use of data matching as an administrative tool in a way that:
- complies with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (Privacy Act)
- is consistent with good privacy practice.
A full copy of the ATO’s privacy policy can be accessed at ato.gov.au/your privacy
Overview
The Commissioner of Taxation Notice of a crypto asset data-matching program (C2024G00249), enacted in 2024, aims to address the problem of non-compliance in the reporting of crypto asset transactions for income tax purposes. This initiative by the Australian Taxation Office (ATO) is designed to acquire and match client identification and transaction data from designated crypto service providers with the ATO's systems to identify and address instances where taxpayers have failed to report crypto asset disposals. The primary policy objective of this program is to promote voluntary compliance by ensuring that taxpayers are aware of how external data is used to support tax obligations. It also seeks to identify and educate taxpayers who may not be meeting their registration and lodgment obligations, as well as to develop and implement strategies to enhance voluntary compliance based on insights gained from the data. This program adheres to the Office of the Australian Information Commissioner’s Guidelines on data matching, ensuring compliance with the Australian Privacy Principles and the Privacy Act 1988.
Scope and Application
The Commissioner of Taxation has announced a data-matching program aimed at enhancing voluntary compliance among individuals and entities involved in the acquisition and disposal of crypto assets, as outlined in the Commissioner of Taxation – Notice of a crypto asset data-matching program (Gazette, 26 April 2024). This program applies to approximately 700,000 to 1,200,000 individuals and entities each financial year, who are required to report their crypto asset transactions for tax purposes. The data-matching initiative will involve the acquisition of client identification and transaction details from crypto designated service providers, which will be matched against the ATO’s systems to identify non-compliance and ensure taxpayers meet their registration, lodgment, reporting, and payment obligations. The data-matching program operates under the guidelines set forth in the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian Government administration (2014) and adheres to the Australian Privacy Principles and the Privacy Act 1988. The program is designed to promote voluntary compliance, educate non-compliant entities, develop targeted treatment strategies, and improve the ATO’s understanding of crypto asset trading behaviours and compliance profiles.
Key Provisions
The main operative sections of this legislation pertain to the acquisition and use of data by the Australian Taxation Office (ATO) for the purpose of ensuring compliance with tax and superannuation obligations related to cryptocurrency. Section 1 outlines the ATO's intention to obtain account identification and transaction data from crypto designated service providers for the financial years 2023-24 to 2025-26. This data includes client identification details such as names, addresses, and phone numbers, as well as transaction details like bank account details and wallet addresses. Section 2 explains the objective of this data acquisition is to match the data with ATO systems to identify clients who may have failed to report a disposal of crypto assets in their income tax return, thereby facilitating tailored treatments to improve compliance.
The Act imposes several obligations on the crypto designated service providers and the ATO. Service providers are obligated to provide the specified data to the ATO as required by Section 1. This includes ensuring that all necessary client identification and transaction details are accurately recorded and transmitted. The ATO, in turn, is required to use the data in accordance with the Office of the Australian Information Commissioner’s Guidelines on data matching (Section 3). This involves ensuring that all data matching activities comply with the Australian Privacy Principles (APPs) and the Privacy Act 1988, and are conducted in a manner consistent with good privacy practice (Section 4).
The legislation also outlines potential consequences for breaches of its provisions. While specific offences are not detailed in the text, it is implied that failure to comply with the data provision requirements could lead to civil or criminal penalties. The maximum penalties for breaches of privacy and data matching regulations can include substantial fines for both individuals and corporations, as well as potential legal action by affected parties. The seriousness of non-compliance is underscored by the need to adhere to the guidelines set forth to protect privacy and ensure lawful data use.