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The taxman has a message for Australian cryptocurrency investors, and Binance wants to help them.
In response to increased pressure from local tax authorities, the Australian branch of leading cryptocurrency exchange Binance has improved users’ ability to accurately report tax liabilities.
Binance has teamed up with cryptocurrency tax startup Koinly to help users dealing with ever-increasing tax obligations in Australia. Through the integration, Binance users in Australia now have access to Koinly’s tax reporting solution.
Koinly, which was founded in 2018, supports over 600 exchanges and wallets, allowing users to sync their entire crypto trading history with a single ATO-compliant platform.
The decision comes as the Australian Taxation Office (ATO) ramps up its efforts to collect taxes on cryptocurrency gains. In July of last year, the ATO sent a letter to 350,000 crypto asset investors and holders about undeclared cryptocurrency gains.
In May 2021, the ATO doubled down with its efforts, reminding 100,000 Australian crypto users to report all gains on their tax returns — another 300,000 people are expected to be prompted to do so as they file their tax returns. It is estimated that over 600,000 taxpayers have recently invested in crypto-assets. The ATO uses data matching in conjunction with exchanges to identify users who may owe taxes.
Robin Singh, the founder of Koinly, explained in an announcement:
“The ATO is collecting bulk records data from Australian crypto exchanges and comparing it to amounts entered on previous tax returns. Failure to declare crypto gains can attract a penalty of 75% of the outstanding tax liability.”
Binance is also increasing its educational efforts down under by hosting an end of financial year tax masterclass in collaboration with Koinly on July 22.
Binance Australia’s Sam Teoh stated that the crypto community has expressed concerns about tax compliance, adding that “with approximately one in every six Australians investing in crypto, taxpayers and tax agents alike are on a steep learning curve.”
Australians are not the only ones who are being watched by the taxman. In late May, the US Treasury proposed that cryptocurrency transactions worth more than $10,000 be reported to the Internal Revenue Service.