Crypto taxation software provider Koinly has announced a partnership with three Australian digital asset exchanges to simplify their clients’ tax reporting.
Coinjar, Cointree and Swyftx announced support for Koinly on July 29, allowing the exchanges’ customers to automatically feed trading data to Koinly via csv or API, and access detailed capital gains reports.
“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,” asserted Koinly founder Robin Singh.
Increased Scrutiny From Regulators
The move follows the Australian Taxation Office sending letters to 350,000 Australians believed to be trading crypto assets to remind them of their tax obligations in March.
The ATO estimated that up to one million Australians are engaged in crypto trading activities — equating to 4% of the country’s entire population.
Singh told Cointelegraph that Koinly entered into discussions with several Australian exchanges after the ATO sent the letters in March.
“We have seen a surge of Australian users on our platform in recent months and a lot of them trade on these exchanges. Likewise the exchanges are also getting a lot of users with questions about taxes. Our partnerships enable us to work together to solve a common regulatory hurdle and make it easier for the regular crypto investor to continue trading without getting caught up in a tax hell,“ he said.
Singh also noted that many traders still do not realize that crypto-to-crypto trades incur tax obligations.
Ato Eyes $3 Billion In Fines From Traders
Last year, the ATO also launched an initiative requiring local cryptocurrency exchanges to share data with government agencies on an ongoing basis.
The information is fed into the ATO’s data-matching protocol, which is used “to identify the buyers and sellers of crypto assets,” and individuals who may not be meeting their reporting requirements.
The ATO predicted that the $1 billion campaign would net a $3 billion return in the form of fees and fines from non-compliant traders.