Australia Crypto Tax Guide
Australian cryptocurrency taxation under the ATO guidance. The guide covers: the ATO view on the crypto assets — the ATO treats the cryptocurrency as the "CGT asset" (the "capital gains tax asset") for the most transactions; the crypto assets are NOT treated as the "currency" or the "money" for the Australian tax purposes; the crypto assets are treated as the "property" (the "intangible property") under the "CGT provisions" (the "Parts 3-1 and 3-3 of the ITAA 1997"); the CGT events for the crypto — the disposal of the crypto asset (the "CGT event A1") occurs when: (a) the crypto is sold for the Australian dollars (the "AUD"), (b) the crypto is exchanged for the other crypto (the "crypto-to-crypto exchange" — the "CGT event A1" for both the crypto disposed and the crypto acquired), (c) the crypto is used to purchase the goods or the services (the "crypto payment" — the disposal of the crypto for the goods or the services triggers the CGT event), (d) the crypto is gifted (the "gift of the crypto" — the disposal at the market value); the capital gain or the capital loss — the capital gain on the crypto disposal is: (the "capital proceeds" — the market value of the crypto at the disposal time) minus (the "cost base" — the market value of the crypto at the acquisition time); the 50% CGT discount applies to the crypto held for at least 12 months (the "CGT discount" — the Australian resident individuals are entitled to the 50% discount); the capital loss on the crypto can be offset against the capital gains from the other assets (the "crypto capital loss offset"); the personal use asset exemption — the crypto assets acquired and used to purchase the personal goods or the services for the value of less than $10,000 (the "personal use asset" — the "collectable" or the "personal use asset" exemption) may be exempt from the CGT if: (a) the taxpayer acquired the crypto for the personal use (the "personal use" — the acquisition of the crypto to purchase the personal goods or the services), AND (b) the value of the crypto is $10,000 or less; the personal use asset exemption does NOT apply to the crypto held as the "investment" or the "speculation"; the staking rewards (the "staking income") — the staking rewards (the "staking income") are treated as the "ordinary income" (the "assessable income") at the time the rewards are received; the staking rewards are taxed at the marginal rate; the cost base of the staked tokens is the market value at the time the rewards are received; the airdrops — the airdropped tokens (the "airdrops") are treated as the "ordinary income" (the "assessable income") at the time the tokens are received; the amount of the income is the market value of the airdropped tokens at the receipt time; the cost base of the airdropped tokens is the market value at the receipt time; the DeFi transactions — the DeFi transactions (the "decentralised finance" transactions — the lending, the borrowing, the liquidity provision, the yield farming) are subject to the CGT and the ordinary income rules; the supply of the crypto to the DeFi protocol is the disposal of the crypto (the "CGT event A1"); the receipt of the interest or the fees from the DeFi protocol is the "ordinary income"; the crypto mining — the crypto mining income (the "mining income") is treated as the "ordinary income" at the time the mined coins are received; the cost base of the mined coins is the market value at the receipt time; the mining expenses (the "electricity, the hardware, the software") are deductible as the "business expenses" if the mining is carried on as the business or as the "investment expenses" if the mining is carried on as the investment; the record keeping for the crypto — the taxpayer must keep the records of: (a) the date and the time of each transaction, (b) the value of the transaction in the Australian dollars (the "AUD value"), (c) the type and the amount of the crypto, (d) the wallet address, (e) the exchange or the platform used, (f) the purpose of the transaction (the "personal use" or the "investment" or the "business"), (g) the fees and the costs incurred; the taxpayer can use the crypto tax software (the "crypto tax calculator" — the "Koinly", the "CryptoTaxCalculator", the "TokenTax", the "CoinTracker") to calculate the capital gains and the losses and to prepare the tax return. All amounts in Australian Dollars (AUD). For related reading, see our Capital Gains Tax Guide → and Tax Filing Procedures Guide →.
CGT Events for Crypto
- Sale for AUD: The sale of the crypto for the Australian dollars triggers the CGT event A1. The capital gain is: (the AUD received) minus (the cost base of the crypto). The 50% CGT discount applies if the crypto is held for at least 12 months.
- Crypto-to-crypto: The exchange of one crypto for the other crypto (the "ETH for the BTC") triggers the CGT event A1 for the crypto disposed. The capital gain is: (the market value of the crypto received) minus (the cost base of the crypto disposed). The exchange is NOT a "like-kind exchange" (the "rollover" does NOT apply to the crypto-to-crypto transactions).
- Crypto payment: The use of the crypto to purchase the goods or the services triggers the CGT event A1. The capital gain is: (the market value of the goods or the services) minus (the cost base of the crypto). The personal use asset exemption may apply if the value of the crypto is $10,000 or less.
For the ATO guidance on the crypto (the "ATO Crypto Assets" page) and the record-keeping requirements, see our Tax Filing Procedures Guide →.
Income vs Capital — Key Distinctions
- Staking / Airdrops — Ordinary Income: The staking rewards, the airdrops, and the DeFi interest are treated as the "ordinary income" (the "assessable income") at the time of the receipt. The income is taxed at the marginal rate. The cost base of the tokens is the market value at the receipt time.
- Holding / Trading — CGT: The crypto held as the investment or the speculation is treated as the "CGT asset". The disposal triggers the CGT. The 50% CGT discount applies to the investment holdings (at least 12 months). The frequent trading may be treated as the "business income" (the "carrying on the business of the crypto trading") rather than the CGT.
For the crypto tax return preparation and the ATO data-matching program, see our Tax Filing Procedures Guide →.