Australian exchanges team up with a crypto tax firm
- Three Australian crypto exchanges teamed up with a crypto tax firm, Koinly.
- The move came after ATO reminded crypto users that they must pay crypto taxes, earlier this year.
- Koinly's systems will now automatically collect traders' data and help them with organizing their tax reports.
Earlier this year, the Australian Taxation Office sent around 350,000 letters to the country’s crypto users, reminding them that they are obligated to pay taxes on the profit gained from trading crypto. However, keeping track of crypto taxes is quite difficult, even for coin users who are careful to note all of their transactions.
This is why Australian exchanges are now teaming up with a crypto tax firm, in order to help their users by simplifying tax reporting.
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Koinly will make tracking crypto trading data simple
So far, three exchanges based in Australia, including Cointree, Coinjar, and Swyftx, all teamed up with a crypto taxation software provider, Koinly. The announcement of the move came out only today, July 29th.
According to the announcements, the exchanges’ customers will now be able to provide their trading data to Koinly automatically. They can use either CSV or API, and feed data into the software, which will allow them to organize and access their capital gains reports.
Koinly’s founder, Robin Singh, commented on the move by saying why it was necessary. Singh said that “Even though there is a lot of guidance around cryptocurrency taxes, it is simply too difficult to calculate taxes by hand especially if you traded on multiple exchanges.”
Australia sees a surge in the number of its crypto traders
Australia has seen a sharp surge in the number of crypto users in recent years. As mentioned, the ATO sent over 350,000 letters, but even this is only one-third of the estimated one million Australians who engage in crypto trading.
After seeing ATO’s efforts to remind everyone of their tax obligations, and seeing crypto users struggle to do so — many of which did not even know they need to pay taxes for crypto — Koinly approached a number of exchanges with its proposal.
Meanwhile, ATO itself knows exactly how much crypto users owe, as it requested that all local exchanges share their data with it last year. All of the data is sent to ATO’s data-matching protocol directly, which allows it to identify crypto users and calculate their taxes.
While the campaign was expensive, costing around $1 billion, ATO predicted that fees and fines for non-compliant traders will be around $3 billion.