The professional services company KPMG, a global organization that offers auditing, accounting, and taxation advisory services, will now offer an estimated tax tracking tool for cryptoasset traders exclusively on Australia-based exchange Independent Reserve.
Australian traders on Independent Reserve will be able to use the Tax Estimator module to gain a rough estimate of their tax obligations to the government of Australia. Independent Reserve was the first Australian cryptoasset exchange to be regulated by the national government.
‘Life ruined’?
Keeping track of taxes owed from cryptocurrency trading has become a very thorny issue, especially in the past couple of years as the industry has experienced a boom and bust cycle. Many traders and investors do not understand or have any notion of the laws that may apply to them.
One young US trader recently became somewhat infamous, for apparently discovering that he owed $400,000 in taxes to the US state of California that he could no longer pay, after his new on-paper fortune crashed hard during the 2018 bear market. Governments seem serious about taxing the new asset class.
CryptoGlobe reported during the summer on a multi-country “crackdown” on crypto tax evasion, in which the US, UK, Netherlands, Australia, and Canada would share information in order to track errant and untaxed crypto gains.
Despite such menacing statements from governments, there is still uncertainty among US tax professionals concerning some aspects of tax reporting on cryptoassets. Even people acting in good faith risk getting bogged down in the thicket of complicated rules of capital gains taxation.
The utility offered by such tools as the one KPMG is offering, therefore, would be of great value if done correctly. One drawback is that users can only get a reasonably accurate picture of their tax obligations if they are trading on a single exchange, in this case the Independent Reserve exchange. Transferring the funds to any other exchange in the global ecosystem of cryptoassets, would presumably change the calculation in some way. As the cryptoasset industry grows, however, such tools are likely to become common.