Hot on the heels of reports that a growing number of SMSFs are sustaining significant losses in crypto asset investments, the ATO has announced that it will be extending the current crypto asset data-matching program for the 2023-24 financial year through to the 2025-26 financial years. Previously, the program covered periods all the way back to the 2014-15 financial year.

Under this program, data will be collected from individuals include: name (given and surname); date of birth; addresses (residential/postal/other); ABN; email address, contact phone numbers, social media account; identifying verification document details; registration IP address; user ID; account type; and sign up date.

For non-individuals (such as SMSFs or other structures), data collected will consist of: business name; addresses (residential/postal/other); ABN; contact phone number; email address; registration IP address; user ID; account type (company, trust, super fund); and sign up date.

For both individuals and non-individuals, the crypto asset transaction details collected by the ATO will comprise of: status of account (open/closed/suspended/lost etc); linked bank account details; wallet address associated with account; lost or stolen crypto amounts linked to accounts; unique identifier; transaction date and time; type of crypto asset; amount (in fiat and crypto); type of transfer; transfer description; total account balance; and IP address.

It is expected that around 700,000 to 1,200,000 individuals and entities will be affected each financial year of the data-matching program. A point of difference with this particular program compared with other data-matching programs is that the data retention period will be 7 years from the receipt of the final instalment of verified data files from data providers, as opposed to the usual 5 years.

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 as of individuals retaining crypto assets over many years before disposing of them, triggering 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.