ATO crypto data-matching program extended

Hot on the heels of reports that a growing number of self managed super funds (SMSFs) are sustaining significant losses in crypto asset investments, the ATO has announced it will be extending its current crypto asset data-matching program for the 2023–2024 financial year through to the 2025–2026 financial year. Under this program, identification data will be collected from both individuals and non-individuals, such as SMSFs or other entities.

Under this program, data will be collected from individuals including names (given and surnames); dates of birth; addresses (residential/postal/other); ABNs; email addresses, contact phone numbers, social media account details, identifying verification document details, registration IP addresses, user IDs, account types and sign-up dates. 

For non-individuals (such as SMSFs or other structures), data collected will consist of business names, addresses (residential/postal/other), ABNs, contact phone numbers, email addresses, registration IP addresses, user IDs, account types (company, trust, super fund); and sign-up dates. 

For both individuals and non-individuals, the crypto asset transaction details collected by the ATO will comprise the status of the accounts (open/closed/suspended/lost, etc), linked bank account details, wallet addresses associated with accounts, lost or stolen crypto amounts linked to accounts, unique identifiers, transaction dates and times, types of crypto assets, amounts (in fiat and crypto), types of transfers, transfer descriptions, total account balances and IP addresses. 

It is expected that around 700,000 to 1.2 million individuals and entities will be affected in each financial year of the data-matching program. A point of difference with this particular program is that the data retention period will be seven years from the receipt of the final instalment of verified data files from data providers, as opposed to the usual five years for other data-matching programs run by the ATO. 

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 noting that crypto assets are often retained over many years before they are disposed of and trigger a CGT event. 

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 and/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.

Source: www.ato.gov.au/about-ato/commitments-and-reporting/in-detail/privacy-and-information-gathering/how-we-use-data-matching/crypto-assets-data-matching-program-protocol 
www.ato.gov.au/individuals-and-families/investments-and-assets/crypto-asset-investments