J5 members include Australia, the United States, the United Kingdom, the Netherlands and Canada.
According to foreign media reports, Australian tax officials are investigating 12 cross-border high-end tax avoidance programs discovered by global data sharing by key countries concerned with the abuse of cryptocurrencies.
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After the meeting of the J5 group of tax authorities in Australia, the United States, the United Kingdom, the Netherlands and Canada, the Australian Taxation Office confirmed that tax officials in these five countries have increased their efforts to combat the use of cryptocurrencies. They confirmed the investigation of up to 50 leads, which are only part of a global survey.
The five countries established J5 a year ago because of growing concerns that tax avoidance, cybercrime and cryptocurrency abuse escalated as criminals took advantage of national tax laws.
Since the establishment of the organization, the data collected between the tax authorities of the five countries has been more than the total data of the past 10 years.
Will Day, deputy director of the Australian Taxation Office, said that J5 member countries are conducting 60 investigations and Australia is directly involved in 12 projects, at least one of which is aimed at “global financial institutions” and their intermediaries. These institutions are believed to enable taxpayers to hide asset and income details.
He continues to say that there is clear evidence that in Australia, someone is helping to avoid taxation or collaborating with others in overseas jurisdictions to engage in criminal activities. The Australian Taxation Office's cooperation with other members of J5 means that more information is now available to support data matching activities specifically for tax offenders. He said:
“The risk of criminals being captured is not as high as ever. In Australia, they usually act as intermediaries between tax evaders and offshore entities.”
A key investigative object is the cryptocurrency. The Dutch tax agency recently closed a cryptocurrency “Mixer” to analyze the information and share it with other members of J5. Encrypted hybrid services increase the anonymity of cryptocurrency holders. They use an algorithm to mix data that might identify the currency holder and other holders, making it extremely difficult to track the final ownership of the asset.
Day said that the link between cryptocurrency investment and money laundering is a particularly worrying issue, and criminals use these online currencies to evade detection. He also believes that tax evasion through cryptocurrencies "is not a criminal act without a victim." He said:
“We found that the use of cryptocurrencies is now unheard of. In Australia, there are absolutely legitimate cryptocurrency investments, but we also see people using cryptocurrencies to facilitate tax crimes.”
Information between J5 members is being shared in a “more organized” way, including through computer networks, enabling organizations to compare, analyze, and exchange data anonymously.