Category Archives: Australian Tax Office

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Australian Tax Regulator Issues Alert on Bitcoin ATM Fraud

Australia is experiencing its own measure of crypto-related fraud where scammers are demanding tax payments through Bitcoin ATMs. To that effect, the Australian Taxation Office (ATO) on 14 November 2018 published a warning to citizens advising them to be cautious of scammers posing as ATO officials.

Compared to previous years, a higher number of scammers are claiming to be associated with the ATO to defraud unsuspecting victims, according to ATO Assistant Commissioner Kath Anderson, who asked Australians to be vigilant for tax scams. She also warned that the ATO will not ask for payments into ATM machines or via gift cards, prepaid cards or direct payments to bank accounts.

Concerns were also voiced by the Assistant Commissioner over the number of citizens sharing personal information – tax file numbers, bank account numbers and dates of birth – with tax scammers, stating that these could increase their susceptibility to fraudulent occurrences. The warning reported that around 6,000 taxpayers have fallen to phishing scams and almost USD 1 million to have been paid to scammers since 1 July 2018.

Payments through cryptocurrency have overtaken iTunes vouchers as the most common method of scam payment. In May, Scamwatch, an Australian consumer watchdog, revealed that Australians had lost around USD 2 million in scams involving cryptocurrencies and initial coin offerings, with about USD 1.2 million lost in Bitcoin scams alone. This was due to the increased popularity of cryptocurrency in the last quarter of 2017 which led to a surge in fake ICOs.

Bitcoin ATMs allow customers to exchange cash for the cryptocurrency, with some also allowing customers to sell the cryptocurrency for cash. However, just last month, the headlines were abuzz with news of fraud after scammers defrauded four Australian Immigrants of more than AUD 50,000 (USD 35,000), by convincing them to deposit money into a Bitcoin ATM or alternatively be arrested for nonexistent debts.

Anderson advised citizens to be wary of scammers demanding payments for debts they aren’t aware they owed, as scammers are growing increasingly sophisticated and exploiting vulnerable people, often using aggressive tactics to swindle them out of their money or personal information.

 

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Australian Government Goes to Public on Cryptocurrency Tax Changes

The Australian Tax Office (ATO) has suggested this month that it needs public input regarding its current legislation regarding cryptocurrency tax obligations. This is partly due to an increased interest in cryptocurrency in general within Australia over the last twelve months.

A public comment process has been initiated in order to examine taxpayers concerns and examine issues which may impact on consumers ability to calculate capital gains or losses for tax purposes.

The ATO points out that private or company tax returns need to incorporate cryptocurrency transactions and that taxpayers will now need to provide details regarding these, such as Australian dollar equivalents and other details regarding the parties involved in the transaction.

Like Japan, Australia sought to strengthen its money laundering laws in 2017, which threw focus on the regulation of digital currencies within Australia. This was a clear shift from its 2015 “hands-off” approach to the use of cryptocurrencies.

Regulation of cryptocurrency has been an issue over the past few years. The Australian government now maintains that transacting with Bitcoin is similar to a barter, being neither money nor foreign currency and as such, is not a financial supply for goods and services purposes. The unpopular tax on Bitcoin purchases will now be lifted in July of this year and Australians will no longer have to pay goods and services tax (GST) on cryptocurrency purchases.

From a consumer perspective, the future seems promising for Australians despite further regulation of cryptocurrencies within the country. Senators from both leading political parties in Australia (both Labour and the Coalition) have called for the Reserve Bank of Australia to accept cryptocurrencies as an official form of currency.

Moves towards regulating the Australian tax system by seeking public consensus indicates that the nation is possibly considering how to incorporate digital currency into the mainstream as cryptocurrencies become more widely used.

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