Until now, it was very difficult for the tax authorities to find out who owned crypto and who did not. And if they knew who was in to crypto, it was almost impossible to keep track of exactly how much crypto they owned and how much profit they made from it.
This has caused many people to act a little out of line when it comes to paying taxes on their crypto profits. But lawyers are warning people! From soon on, the tax authorities will be able to check exactly who owns crypto, how much they own and how much profit they made.
The Lawyers’ warning
The lawyers even recommend to amend previous years’ tax returns, if you are aware that you have not been fair on your crypto taxes. Indeed, everything would soon be visible to the tax authorities, according to laywers.
This is because of the new EU directive that deals with the data exchange. This directive states that the tax authorities will have the power to see everyone’s cryptocurrency assets. Coming into effect later this year. Until now, the tax authorities just ‘trusted’ that you would honestly declare how much crypto you owned, but that is about to change. It will no longer make sense to lie about how much crypto you own.
As you may know, tax evasion is illegal. You can receive fines and even go to jail. Restoring old tax returns does make sense, according to lawyers, as this could reduce the penalty.
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