Australian Tax Office Investigates Crypto-Related Tax Avoidance Schemes

News | June 7, 2019 By:

The Australian Tax Office (ATO) is investigating 12 international tax evasion schemes focused on the abuse of cryptocurrencies.

The investigations was announced following a meeting of the Joint Chiefs of Global Tax Enforcement (J5), an alliance that focuses on tackling professional enablers that facilitate offshore tax crime, cybercrime and the threat of cryptocurrencies to tax administrations. Formed in 2018, the alliance includes the heads of tax crime and senior officials from the Australian Criminal Intelligence Commission (ACIC) and ATO, the Canada Revenue Agency (CRA), the Dutch Fiscal Intelligence and Investigation Service (FIOD), Her Majesty’s Revenue & Customs (HMRC), and Internal Revenue Service Criminal Investigation (IRS-CI).

Members of the J5 are currently undertaking 60 joint investigations, with the ATO directly involved in 12. At least one investigation involves a “global financial institution” that has allegedly helped customers hide assets and income details.

ATO deputy commissioner Will Day said that links between cryptocurrency investment and money laundering were a particular concern, with criminals using the digital currencies to avoid detection.

“We’re seeing the use of cryptocurrencies in ways that we haven’t seen before,” Day said. “At the Australian level, there is definitely legitimate use for investment in cryptocurrencies, but we’re also seeing the use of them to facilitate tax crimes.”

According to Day, the formation of the J5 has allowed a more organized and intensive data sharing process. Working within existing treaties and laws, J5 countries shared information and were able to open new cases, more rapidly develop existing cases in the enforcement process, and find efficiencies to reduce the time it takes to work cases.

“I’m pleased with the progress the J5 has made on several significant joint investigations since its establishment last year,” said Day. “The collective intelligence available through the J5 is instrumental in enabling us to tackle serious and organized financial crime threats located in both Australia and offshore.”

Hans van der Vlist, General Director FIOD, said that the cooperation between the J5 countries is becoming more effective and operational.

“Two weeks ago we took offline an important online mixer for cryptocurrencies,” van der Vlist said. “We are now analyzing the seized information. We expect good leads for investigations in J5 countries. Another example is the FCInet matching system that will help us in the fight against transnational fiscal and financial crime.”