The Australian branch of leading cryptocurrency exchange Binance has increased the ability for users to accurately report tax liabilities amidst increased pressure from local tax authorities.
Binance has partnered with cryptocurrency tax startup Koinly to assist users grappling with ever-increasing tax obligations down under. Binance users in Australia have been offered access to Koinly’s tax reporting solution through the integration.
Koinly was founded in 2018 and supports over 600 exchanges and wallets, enabling users to sync their full crypto trading history with one central ATO-compliant platform.
The move comes as the Australian Tax Office (ATO) increases its effort to collect taxes on cryptocurrency gains. In July last year, the ATO targeted 350,000 crypto asset investors and holders with a letter regarding 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 — with a further 300,000 people expected to be prompted to do so as they lodge their returns. It estimated that there are over 600,000 taxpayers that have invested in crypto-assets in recent years. The ATO uses data matching with exchanges to identify users who may have tax bills.
In an announcement shared with Cointelegraph, Koinly founder Robin Singh explained:
“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.
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Sam Teoh, of Binance Australia, stated that the crypto community has voiced their concern around tax compliance, adding “with approximately one in six Australians investing in crypto, taxpayers and tax agents alike are on a steep learning curve.”
Australians are not the only ones coming under the watchful eye of the taxman. In late May, the U.S. Treasury proposed crypto transactions over $10,000 be reported to the Internal Revenue Service.