The Australian arm of the leading cryptocurrency exchange Binance has increased users’ ability to accurately report tax obligations amid increased pressure from local tax authorities.
Binance has partnered with cryptocurrency tax start-up Koinly to help users struggling with ever-increasing tax obligations. Binance users in Australia had access to Koinly’s tax reporting solution through the integration.
Koinly was founded in 2018 and supports over 600 exchanges and wallets, allowing users to sync their entire crypto trading history with a central ATO-enabled platform.
The move comes as the Australian Tax Office (ATO) steps up efforts to collect taxes on cryptocurrency earnings. In July of last year, the ATO targeted 350,000 investors and crypto asset holders with a letter regarding unreported cryptocurrency gains.
In May 2021, the ATO doubled with its efforts, reminding 100,000 Australian crypto users to report all earnings on their tax returns – and another 300,000 people should be asked to do so when they file their returns. He estimated that more than 600,000 taxpayers have invested in cryptoassets in recent years. The ATO uses the data correspondence with the exchanges to identify users who may have tax invoices.
In an announcement shared with Cointelegraph, Koinly founder Robin Singh explained:
“The ATO collects data from bulk registrations from Australian crypto exchanges and compares it to amounts entered in previous tax returns. Failure to report crypto gains may result in a penalty of 75% of tax payable.
Binance is also increasing its education efforts by accommodation a fiscal year-end masterclass in collaboration with Koinly on July 22.
Sam Teoh, of Binance Australia, said the crypto community has expressed concerns about tax compliance, adding “with about one in six Australians investing in crypto, taxpayers and tax officials are on a steep learning curve.” .
Australians are not the only ones to be watched by the tax authorities. At the end of May, the US Treasury proposed crypto transactions over $ 10,000 must be reported to the Internal Revenue Service.