If you own cryptocurrency in Australia, you have probably realised that tax rules around digital assets are no longer optional or unclear. I work with Australian crypto investors every day, and the same questions come up again and again. What transactions are taxable? When do capital gains apply? How does income from staking, NFTs, or DeFi fit into ATO rules? This guide is written to give you clear answers without confusion or legal jargon.
Australia treats cryptocurrency as property, not money, and that single detail shapes how every transaction is taxed. Whether you are buying and holding Bitcoin, swapping tokens, earning rewards, or running a crypto business, your tax outcome depends on how and why you use crypto. This 2026 guide brings together current ATO rules, real examples, and reporting steps so you can stay compliant and avoid unwanted surprises at tax time.
Key Takeaways
- Australia taxes cryptocurrency as property under capital gains and income rules
- Holding crypto longer than 12 months qualifies for a 50% CGT discount
- ATO uses exchange data matching so crypto disposals must be reported
A free Australian crypto tax software can help you calculate your taxes easily.
Is Cryptocurrency Taxable in Australia?
Yes, cryptocurrency is taxable in Australia. The Australian Taxation Office treats crypto as property rather than money, which places it within the existing tax framework. This classification means crypto is covered by capital gains and income tax rules instead of currency laws.
Tax applies when crypto is disposed of or earned. Capital Gains Tax usually applies when you sell, swap, spend, or gift crypto. Income Tax applies when you receive crypto through activities like work payments, staking rewards, mining income, or similar earning events.
Crypto Tax in Australia: Key Regulations
In Australia, cryptocurrency taxation is mainly governed by the Income Tax Assessment Act 1997. The way crypto is taxed depends on whether you are treated as an investor, which applies to most individuals, or a trader carrying on a business. The Australian Taxation Office applies existing tax law to digital assets rather than using a separate crypto specific framework.
Capital Gains Tax (CGT)
For most individuals, cryptocurrency transactions fall under Capital Gains Tax rules.
- Section 108-5 defines cryptocurrency, including Bitcoin, NFTs, and stablecoins, as a CGT asset.
- Section 104-10 covers CGT Event A1, which occurs when crypto is sold, swapped, spent, or gifted.
- Division 110 explains how to calculate the cost base using purchase value and related fees.
- Division 115 allows a 50% CGT discount when crypto is held for 12 months or more.
Ordinary Income
In some situations, crypto is taxed as regular income instead of capital gains.
- Section 6-5 applies when crypto is received from staking, mining, airdrops, or salary payments. The AUD value at receipt becomes taxable income.
- Section 15-15 may apply to one off profit focused transactions even if no business exists.
Business Trading and Traders
If crypto activity is frequent, organised, and profit driven, it may be treated as a business.
- Division 70 treats crypto as trading stock, meaning profits are taxed as ordinary income.
- Section 8-1 allows traders to deduct business related expenses. The CGT discount does not apply.
Exemptions and Anti Overlap Rules
Some limited exemptions exist under Australian tax law.
- Section 118-10 allows CGT to be ignored for personal use assets under 10000 AUD, but this applies only in rare cases.
- Section 118-20 prevents double taxation by reducing capital gains when income tax already applies.
Key ATO Determinations
The ATO has issued rulings to clarify crypto treatment under existing law.
- TD 2014/25 confirms Bitcoin is not foreign currency.
- TD 2014/26 confirms cryptocurrency is a CGT asset.
- TD 2014/27 explains when Bitcoin can be treated as trading stock.
Latest Updates on Crypto Tax Australia
Since Australia introduced clearer crypto tax guidance, the ATO has steadily expanded enforcement, reporting, and classification rules. Below is a reverse chronological overview of the most important regulatory and compliance updates affecting crypto investors and traders.
2026: Global Transparency Expansion
The Australian Taxation Office now receives crypto transaction data from global exchanges, not just Australian platforms. There is also increased scrutiny on wash sales, with blockchain analysis used to detect artificial loss creation.
2025: CARF Commitment and Wrapped Token Rules
Australia formally committed to the OECD Crypto-Asset Reporting Framework (CARF). The ATO also clarified that wrapping and unwrapping tokens, such as BTC to wBTC, triggers a Capital Gains Tax disposal.
2024: Stage 3 Tax Cuts Take Effect
From July 1, 2024, revised income tax brackets reduced marginal tax rates for many individuals. While CGT rules did not change, the effective tax payable on crypto gains decreased for most taxpayers.
2023: DeFi and NFT Tax Clarifications
The ATO issued targeted guidance confirming staking rewards as ordinary income at receipt. NFT swaps were also confirmed as taxable CGT events, bringing more certainty to DeFi and NFT reporting.
2022: Crypto Excluded as Foreign Currency
The government clarified that crypto is not foreign currency, backdated to July 2021. This removed access to foreign exchange exemptions and firmly placed crypto within the CGT framework.
2021: Expanded Data Matching and Nudge Letters
The ATO extended its crypto data-matching program, collecting data on around 600,000 individuals. Over 100,000 warning letters were issued to taxpayers suspected of underreporting crypto gains.
Can ATO Track My Cryptocurrencies?
Yes, the ATO can track cryptocurrency activity in Australia. It operates a dedicated data matching program that focuses on cryptocurrency activity. Under this program, crypto exchanges provide user and transaction information, which the ATO compares with lodged tax returns to identify gaps or mismatches. In recent years, the ATO has formally requested data covering more than 1 million Australian crypto users.
AUSTRAC Registration And Reporting Rules
All crypto exchanges must register with AUSTRAC in Australia and follow AML and KYC rules. These obligations require exchanges to verify user identities, monitor transactions, and retain records that can be shared with regulators when requested.
What Information The ATO Can Access?
Crypto exchanges and service providers are legally required to share user and transaction data with the ATO when requested. This allows the tax authority to match crypto activity with lodged tax returns.
- Full name and residential address
- Email address and contact phone number
- Linked bank account details
- Exchange account identifiers
- Dates and timestamps of transactions
- Types of crypto assets traded or held
- AUD value of each transaction at the time it occurred
Alert: The ATO has confirmed it holds crypto transaction data dating back to 2014. This allows it to review historical activity and issue notices if past tax returns do not reflect reported crypto transactions.
When To Report Crypto Taxes in Australia?
The Australian tax year runs from 1 July to 30 June of the following year. Any crypto transactions that result in capital gains or income during this period must be reported in the return for that financial year, even if no tax is ultimately payable.
If you lodge your return yourself, the deadline is 31 October following the end of the tax year. For the 2024–25 financial year, this means crypto activity must be reported by 31 October 2025. If you use a registered tax agent and are on their client list by 31 October, the deadline is then extended to 15 May 2026, depending on the circumstances.
Crypto Investor vs Crypto Traders in Australia
In Australia, how your crypto activity is taxed depends heavily on whether the ATO views you as a crypto investor or a trader. This distinction is based on the nature, scale, and intent of your activity, not on what you personally call yourself.
Criteria | Crypto Investor | Crypto Trader |
Primary intent | Long term wealth growth | Regular profit generation |
Activity level | Occasional buying and selling | Frequent and high volume trades |
Structure | Personal investment activity | Business like setup and systems |
Tax treatment | Capital Gains Tax applies | Income Tax applies |
Applicable tax rate | Marginal tax rate from 0% to 45% | Marginal tax rate from 0% to 45% |
CGT 50% discount | Available after 12 months | Not available |
Expense deductions | Not allowed | Allowed for business related costs |
Record keeping | Investment focused records | Business level accounting records |
Examples | Buy and hold crypto, occasional swaps | Trading businesses, large scale mining |
Note: In some cases, a person can fall into both categories. For example, you may operate a crypto trading business while also holding separate long term personal investments. In such situations, the ATO expects clear separation of wallets, records, and reporting for each activity type.
Income Tax on Crypto in Australia
Income tax applies when cryptocurrency is earned rather than disposed of. In these cases, the ATO treats crypto the same way as regular income, taxing it based on its AUD value at the time you receive it.
Income Tax Rate 2025-26
Crypto income is taxed using standard individual income tax rates. The applicable rate depends on your total taxable income for the year, including crypto earnings.
Taxable income | Tax on this income |
0 – $18,200 | Nil |
$18,201 – $45,000 | 16c for each $1 over $18,200 |
$45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
$135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
$190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
Capital Gains Tax on Cryptocurrency in Australia
As mentioned above, the ATO considers crypto and other digital assets as property. Therefore, any transaction that results in gain is taxed under capital gains tax. The ATO treats most investment related crypto activity under the CGT framework, meaning tax is triggered when ownership changes or crypto is used.
Capital Gains Tax Rate for 2025
In Australia, capital gains from cryptocurrency or other digital assets are taxed at your marginal income tax rate. The applicable rate depends on your total taxable income after adding net capital gains for the year.
Note: If you are classified as a crypto trader in Australia, then assets held for more than 12 months, allows you to reduce your taxable gain by 50%. However, crypto traders cannot avail this tax break in their tax filing process.
Tax on Crypto Capital Losses in Australia
A crypto capital loss occurs when you dispose of cryptocurrency for less than its original acquisition cost. Under Australian tax rules, these losses can be used to reduce your overall capital gains for the year. If your losses exceed your gains, the unused amount can be carried forward to future years with no expiry limit, provided they are applied at the first available opportunity.
Crypto capital losses can offset gains from other capital assets, including shares and property. However, a net capital loss cannot be used to reduce regular income such as salary or business earnings. Accurate records of purchase value, disposal value, and transaction dates are essential to support any loss claims made to the Australian Taxation Office.
Crypto Wash Sales Rule in Australia
The ATO closely monitors attempts to create artificial crypto losses through wash sales. A wash sale occurs when crypto is sold to realise a loss and then repurchased shortly after with the intention of gaining a tax benefit rather than changing economic ownership.
Australia does not set a fixed timeframe to define a wash sale. Instead, the ATO focuses on intent and behaviour. If a transaction pattern suggests losses were deliberately created to reduce tax, it may deny the loss and apply penalties, interest, or further compliance action.
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Tax on Lost or Stolen Cryptocurrencies in Australia
The ATO allows a capital loss to be claimed if the asset is genuinely lost or stolen and cannot be recovered, provided clear evidence of ownership and loss is available.
When Lost or Stolen Crypto Can Be Treated as a Capital Loss?
A capital loss may be claimed when the crypto asset is permanently inaccessible or stolen and cannot be replaced. This usually applies where private keys are lost, wallets are compromised, or assets are taken through scams or hacking incidents. If recovery is possible, the asset is not considered lost for tax purposes.
If you receive insurance or compensation for the loss, the capital loss must be reduced by the amount received. Where compensation exceeds the original cost base, a capital gain may arise instead.
Evidence Required to Claim a Loss
To support a capital loss claim, you must be able to prove ownership and loss. The ATO generally expects evidence such as:
- Acquisition records,
- Wallet details,
- Transaction history, and
- Proof that the wallet was under your control before access was lost.
Types of Lost or Stolen Crypto Transactions
- Loss of private keys with no recovery option
- Theft due to exchange hacks or wallet breaches
- Crypto lost through scams or fraudulent transactions
- Assets locked in wallets where access is permanently lost
- Crypto stolen from hot or cold wallets without recovery
Example:
Sam purchased 1.5 ETH in February 2024 for 3,000 AUD. On 02 April 2025, he lost access to the wallet after permanently losing the private keys and could not recover the assets. He retained records showing purchase details, wallet address, and control of the wallet.
As the crypto could not be recovered and no compensation was received, he can claim a capital loss of 3,000 AUD in the relevant income year. This loss can be used to offset capital gains in the same year or carried forward to future years.
An Overview of Cryptocurrency Taxes in Australia for 2025-26
Crypto tax treatment in Australia depends on the type of transaction and how the crypto is used. The table below gives a clear snapshot of how common crypto activities are treated for tax purposes during the 2025-26 period.
Transaction Type | Tax Treatment |
Buying crypto with AUD | Tax Free |
Holding crypto without disposal | Tax Free |
Selling crypto for AUD | Capital Gains Tax |
Swapping crypto for crypto | Capital Gains Tax |
Using stablecoins in swaps | Capital Gains Tax |
Moving crypto between own wallets | Tax Free |
Paying transfer or network fees in crypto | Capital Gains Tax |
Adding liquidity and receiving LP tokens | Capital Gains Tax |
Removing liquidity from DeFi pools | Capital Gains Tax |
Receiving airdrops | Income Tax |
Selling or trading airdropped tokens | Capital Gains Tax |
Receiving crypto from a hard fork | Tax Free |
Selling crypto received from a hard fork | Capital Gains Tax |
Token contract or address migration | Tax Free |
Giving crypto as a gift | Capital Gains Tax |
Receiving crypto as a gift | Tax Free |
Selling or re gifting received crypto | Capital Gains Tax |
Donating crypto to a DGR | Tax Free |
Mining crypto as a hobby | Capital Gains Tax on disposal |
Mining crypto as a business | Income Tax |
Receiving staking rewards | Income Tax |
Selling staking rewards | Capital Gains Tax |
Margin trading gains | Capital Gains Tax or Income Tax |
CFD trading gains | Income Tax |
Futures and options profits | Capital Gains Tax or Income Tax |
Referral and sign up bonuses | Income Tax |
Getting paid salary or freelance income in crypto | Income Tax |
Spending crypto not treated as personal use | Capital Gains Tax |
Spending crypto as a personal use asset | Tax Free |
Buying gift or debit cards using crypto | Capital Gains Tax |
Gambling winnings received in crypto | Tax Free |
Selling crypto gambling winnings | Capital Gains Tax |
How Are Different Crypto Transactions Taxed in Australia?
Tax on Buying Crypto With AUD
Buying cryptocurrency using AUD or other fiat currencies is not a taxable event in Australia. The ATO does not apply capital gains tax or Income Tax at the time of purchase. However, the purchase price and related fees form the cost base, which is used later when the crypto is sold or otherwise disposed of.
Example:
Emma buys 0.5 BTC for 25,000 AUD using her bank account. No tax is payable at the time of purchase. Emma must keep records of the purchase value and date, as these details will be used to calculate capital gains tax when she sells or swaps the BTC in the future.
Tax on Holding Crypto Without Disposal
Holding cryptocurrency without selling, swapping, spending, or gifting it does not trigger any tax in Australia. Even if the market value of your crypto increases over time, the ATO does not tax unrealised gains. Tax is only applied when a disposal event occurs.
Example:
Liam buys ETH in August 2024 and holds it throughout the year while its value rises. Since he has not sold, exchanged, or used the ETH, no tax is payable during this period.
Tax on Selling Crypto For AUD
Selling cryptocurrency for AUD is treated as a disposal and triggers Capital Gains Tax in Australia. The taxable amount is the difference between the sale value and the original cost base. If the crypto was held for more than 12 months, an eligible individual may apply the 50% CGT discount.
Example:
Noah buys SOL for 4,000 AUD and later sells it for 6,500 AUD. He makes a capital gain of 2,500 AUD. This gain must be reported for tax purposes and taxed at his marginal rate.
Tax on Swapping Crypto For Crypto
Exchanging one cryptocurrency for another is treated as a disposal in Australia and is subject to Capital Gains Tax. The value of the crypto received, measured in AUD at the time of the swap, is used to calculate the gain or loss on the asset given up.
Example:
Olivia swaps USDT for ETH when the ETH received is worth 18,000 AUD. Her original USDT cost base was 12,000 AUD. Olivia records a capital gain of 6,000 AUD, which must be reported in her tax return.
Tax on Moving Crypto Between Own Wallets
Transferring cryptocurrency between wallets or exchanges that you own is not a taxable event in Australia. The ATO does not treat these transfers as disposals. However, it is important to track these movements to maintain accurate cost base records for future taxable events.
Example:
Ethan moves ADA from his exchange wallet to a hardware wallet for security. Since ownership does not change, no Capital Gains Tax applies. He should still keep transfer records for future reference.
Tax on Paying Transfer Or Network Fees In Crypto
When you pay transfer or network fees using cryptocurrency, the ATO treats this as a disposal of the crypto used to pay the fee. Capital Gains Tax applies to that portion, even though the transfer itself between your own wallets is tax free.
Example:
Sophia transfers ETH from one wallet to another and pays a network fee of 0.004 ETH. If that ETH was worth 18 AUD at the time of payment, she must report a disposal of 18 AUD and calculate any capital gain or loss on that amount.
Tax on Holding Crypto Without Disposal
Holding cryptocurrency without selling, swapping, spending, or gifting it does not trigger any tax in Australia. Even if the market value of your crypto increases over time, the ATO does not tax unrealised gains. Tax is only applied when a disposal event occurs.
Example:
Liam buys ETH in August 2024 and holds it throughout the year while its value rises. Since he has not sold, exchanged, or used the ETH, no tax is payable during this period.
Tax on Crypto Airdrops
Crypto airdrops are taxed differently depending on whether you are receiving or disposing of the tokens. In most cases, the ATO treats airdropped tokens as ordinary income when you receive them, based on their fair market value in AUD. When you later sell, swap, spend, or gift those tokens, Capital Gains Tax applies.
Example:
Daniel receives an airdrop of 400 tokens valued at 2 AUD each. He reports 800 AUD as income in that tax year. Months later, Daniel sells all tokens for 1,200 AUD. The original 800 AUD becomes his cost base, resulting in a capital gain of 400 AUD, which must be reported separately.
Tax on Hard Forks
Receiving cryptocurrency from a hard fork is not taxed at the time of receipt for investors in Australia. The new coins are assigned a cost base of 0. Capital Gains Tax applies only when the forked coins are sold, swapped, spent, or gifted.
Example:
Steve receives 1 BCH from a Bitcoin hard fork at no cost. No tax is payable when the BCH is received. If he later sells the BCH for 1,800 AUD, the full amount is treated as a capital gain and taxed accordingly.
Tax on Token Contract Or Address Migration
When a cryptocurrency moves to a new contract address or migrates to a new blockchain, the ATO generally treats this as a non taxable event. Since ownership remains the same and no value is realised, Capital Gains Tax does not apply. However, if the old tokens continue to hold value, the event may be treated as a fork instead.
Example:
Ava holds tokens that migrate from an old contract to a new mainnet version. She receives the new tokens on a one to one basis and the old tokens become unusable. No tax is triggered. If the old tokens retained value, the ATO could treat the event as a hard fork and apply Capital Gains Tax on disposal.
Tax on Cryptocurrency Gifts
Here’s how different transactions related to gifting cryptocurrencies are taxed by the ATO:
Giving Crypto As A Gift
Giving cryptocurrency as a gift is treated as a disposal for tax purposes in Australia. Capital Gains Tax applies if the crypto has increased in value since acquisition. The gain or loss is calculated using the market value of the crypto in AUD on the date the gift is given.
Example:
Lucas bought DOT for 2,000 AUD and later gifted it to a friend when its value was 3,200 AUD. He must report a capital gain of 1,200 AUD, even though no money was received.
Tax on Receiving Crypto As Gift
Receiving cryptocurrency as a gift is not a taxable event in Australia. The ATO does not apply Income Tax or Capital Gains Tax at the time of receipt. However, the market value in AUD on the day you receive the crypto becomes your cost base for future disposals.
Example:
Mia receives LINK as a gift from a family member when its value is 1,500 AUD. No tax is payable on receipt.
Tax on Selling Or Re-Gifting Received Crypto
Selling, swapping, spending, or re-gifting cryptocurrency that you previously received as a gift is treated as a disposal in Australia. Capital Gains Tax applies based on the difference between the disposal value and the original market value when the crypto was received.
Example:
Pat receives ADA as a gift valued at 900 AUD. A few months later, he re-gifts the ADA when its value is 1,300 AUD. He must report a capital gain of 400 AUD, even though he did not originally purchase the crypto.
Tax on Donating Crypto To A DGR
Donating cryptocurrency to a Deductible Gift Recipient is treated as a tax free event in Australia. No Capital Gains Tax applies on the disposal, and the donation value can be claimed as a tax deduction based on the market value in AUD at the time of donation.
Example:
Isla donates ETH worth 2,400 AUD to a registered charity that qualifies as a Deductible Gift Recipient. Isla does not pay Capital Gains Tax on the donation and can claim a 2,400 AUD deduction in her tax return.
Tax on Mining Cryptocurrency
Crypto mining in Australia is taxed based on whether the activity is carried out as a hobby or as a business. The ATO looks at factors such as scale, intent, and regularity to decide how mining rewards should be taxed.
Crypto Mining As A Hobby
When mining is treated as a hobby, the rewards are not taxed when received. The mined crypto is treated as a capital asset with a cost base of 0. Capital Gains Tax applies only when the crypto is later sold, swapped, spent, or gifted. As per the ATO, rewarded coins are not income but rather a capital acquisition.
Example:
Ryan mines crypto at home using personal equipment as a pastime. He later sells the mined tokens for 1,800 AUD. Since the cost base is 0, the full 1,800 AUD is treated as a capital gain.
Mining Crypto As A Business
When mining is conducted as a business, the fair market value of the mined crypto in AUD is taxed as income at the time of receipt. Business related expenses such as electricity and equipment may be deductible.
Example:
Ella operates a large-scale mining setup and receives mining rewards worth 9,500 AUD. She must report 9,500 AUD as income and may deduct eligible mining expenses when filing her tax return.
Tax on Staking Rewards
Staking rewards are treated as ordinary income in Australia. The ATO taxes staking rewards based on their market value in AUD at the time you receive the tokens, regardless of whether you immediately sell or hold them. Rewards earned through proof of stake, validator roles, proxy staking, or voting mechanisms are all taxed the same way.
When you later sell, swap, spend, or gift the staked tokens, Capital Gains Tax applies based on the change in value from the time they were received.
Example:
Nathan receives staking rewards worth 1,200 AUD from locking tokens in a validator node. He must report 1,200 AUD as income. If he later sells the tokens for 1,600 AUD, the additional 400 AUD is treated as a capital gain.
Tax on Crypto Margin Trading
Crypto margin trading involves borrowing funds from an exchange to increase trade size and repaying the borrowed amount later, usually with interest. The ATO has not issued clear guidance on how margin trading gains should be taxed. Depending on your activity and intent, profits may be treated as Capital Gains or Income Tax, making professional advice important.
Example:
Oliver uses margin trading to buy BTC with borrowed funds. After closing the position, he earns a profit of 2,000 AUD. Based on his trading pattern, the profit may be taxed as a capital gain or as income.
Tax on CFD Trading
Contracts for Difference are usually taxed as Income Tax in Australia. In most cases, profits from CFD trading are treated as ordinary income, especially where the activity is profit driven or business like. Capital Gains Tax concessions generally do not apply, but losses from CFD trading can usually be claimed as deductions.
Example:
Alyse trades crypto CFDs regularly and earns a profit of 6,000 AUD during the year. The full amount is reported as income and taxed at her marginal rate.
Tax on Crypto Futures And Options
Crypto futures and options involve price speculation rather than ownership of the underlying asset. The ATO has not issued specific guidance on how profits or losses from these trades should be taxed. In practice, gains realised when positions are closed are generally treated as Capital Gains, depending on the nature of the activity.
Example:
Tom enters a BTC futures contract and closes the position with a profit of 3,500 AUD. Since the gain is realised on closure, the 3,500 AUD is likely treated as a capital gain and taxed accordingly.
Tax on Referral And Sign Up Bonuses
Cryptocurrency received from referral programs or sign up bonuses is taxed as Income in Australia. The ATO treats these rewards like commission, meaning the market value in AUD at the time of receipt must be reported as income, even if the crypto is not immediately sold.
Example:
Aiden receives a referral bonus worth 450 AUD in crypto after inviting a friend to an exchange. Aiden must report 450 AUD as income in his tax return.
Tax on Salary Or Freelance Income In Crypto
Receiving Bitcoin or other cryptocurrency as payment for work is taxed as Income in Australia. The ATO requires you to report the market value in AUD at the time the crypto is received, regardless of whether you later sell or hold it. Salary sacrifice arrangements paid in crypto are treated as fringe benefits.
Example:
Chloe is paid Bitcoin worth 3,200 AUD for freelance work. She must report 3,200 AUD as income. If Chloe later sells the Bitcoin, any change in value is assessed under Capital Gains Tax.
Tax on Spending Cryptocurrencies
Spending cryptocurrency is generally treated as a disposal in Australia. Whether Capital Gains Tax applies depends on whether the crypto qualifies as a personal use asset or was held for investment or profit making purposes.
Spending Crypto for a Personal Use Asset
If cryptocurrency is acquired and used mainly to purchase goods or services for personal consumption, it may qualify as a personal use asset. In such cases, spending the crypto does not trigger Capital Gains Tax. The ATO applies this exemption narrowly, especially where crypto is held for a very short period.
Example:
Travis buys crypto worth 120 AUD with the sole intention of paying for a hoodie the same day. Since the crypto was acquired and used immediately for personal consumption, no Capital Gains Tax applies.
Spending Crypto for a Non Personal Use Asset
Cryptocurrency spending is treated as non-personal when used for investment or profit making scheme, the ATO treats this as a disposal. Such cases are when any gain made between acquisition and spending is subject to Capital Gains Tax.
Example:
Jasmine holds crypto for several months with the intention of selling it at a higher price. She later uses the crypto to buy furniture. Because the crypto was held as an investment, the spending triggers Capital Gains Tax on any gain made.
Tax on Buying Gift Or Debit Cards Using Crypto
Buying or loading gift cards or debit cards using cryptocurrency is treated as a disposal in Australia. The ATO considers this action a sale of your crypto, which means Capital Gains Tax applies to any increase in value since acquisition.
Example:
Josh uses crypto to load a prepaid debit card worth 800 AUD. His original cost base for the crypto used was 550 AUD. He must report a capital gain of 250 AUD, even though the value was converted into a card rather than cash.
Tax on Gambling Wins Received In Crypto
The ATO has released guidance clarifying that cryptocurrency received as prizes or winnings from gambling activities is not treated as ordinary income. This includes winnings from lotteries, competitions, and game shows. No Income Tax applies at the time the crypto is received. However, the market value in AUD on the receipt date becomes the cost base for future disposals.
Example:
Aaron wins crypto worth 900 AUD from an online game show. No tax is payable when he receives the prize. If Aaron later sells the crypto for 1,400 AUD, the 500 AUD increase is treated as a capital gain and taxed accordingly.
How are NFTs Taxed in Australia?
In Australia, NFTs are treated as crypto assets by the ATO. For investors, NFTs fall under the Capital Gains Tax framework, while creators or businesses may be subject to Income Tax. The tax outcome depends on how the NFT is acquired, used, and disposed of, as outlined below.
NFT Transaction | Tax Type | Tax Treatment Method |
Creating and selling NFTs | Income Tax | Sale value taxed as ordinary income |
NFT staking or farming rewards | Income Tax | Market value taxed on receipt |
Buying an NFT with cryptocurrency | Capital Gains Tax | Capital Gains Tax on crypto disposed to buy NFT |
Selling an NFT for crypto | Capital Gains Tax | Capital Gains Tax on difference between sale and cost |
Selling an NFT for fiat | Capital Gains Tax | Capital Gains Tax based on AUD sale value |
Swapping one NFT for another | Capital Gains Tax | Capital Gains Tax on NFT given up |
Holding an NFT without disposal | No Tax | No tax until disposal occurs |
Lost In Your Crypto Tax Chaos?
We’ll organise everything, reports, gains, losses.
Also Read: How Are NFTs Taxed in Australia?
How are DeFi Transactions Taxed in Australia?
The ATO has released guidance on DeFi transactions that can trigger either Capital Gains Tax or Income Tax, depending on how the transaction works and whether you are disposing of crypto or earning new tokens. Each DeFi activity is assessed based on its economic outcome rather than the platform used.
DeFi Transaction | Tax Type | Tax Treatment Method |
Lending crypto on DeFi platforms | Capital Gains Tax | Treated as a crypto to crypto disposal |
Adding liquidity to pools | Capital Gains Tax | Disposal occurs when LP tokens are received |
Removing liquidity from pools | Capital Gains Tax | Disposal of LP tokens on exit |
Receiving DeFi rewards or incentives | Income Tax | Market value taxed on receipt |
Yield farming rewards | Income Tax | Treated as interest like income |
Wrapping crypto tokens | Capital Gains Tax | Disposal of original token |
Unwrapping crypto tokens | Capital Gains Tax | Disposal of wrapped token |
Trading tokens on DeFi protocols | Capital Gains Tax | Gain taxed on each swap |
Participating in ICOs or IEOs | Capital Gains Tax | Crypto used treated as disposed |
Selling tokens received from ICOs or IEOs | Capital Gains Tax | Cost base set at ICO value |
How are DAOs Taxed in Australia?
Decentralised Autonomous Organisations are member owned structures where decisions are made through token holder voting rather than central management. DAO tokens often give holders governance rights and, in some cases, economic benefits. From a tax perspective, DAOs are assessed based on the nature of the transactions rather than the structure itself.
The ATO has not issued specific guidance on DAO taxation. In practice, income received from DAO participation may be treated as Income Tax, while selling or disposing of DAO tokens may trigger Capital Gains Tax. Due to the complexity and evolving nature of DAOs, professional tax advice is strongly recommended.
How To Calculate Crypto Taxes in Australia?
Calculating crypto taxes in Australia depends on whether your transactions are taxed as income or as capital gains. Each category follows a different calculation method based on how and when the crypto was received or disposed of.
Calculating Income Tax
Crypto taxed as income is calculated using the fair market value in AUD on the day you receive the tokens. This applies to rewards, payments, bonuses, and similar earnings.
Taxable Crypto Income = Market Value in AUD on Date of Receipt
Use KoinX’s crypto tax calculator to automatically track income values and generate accurate tax figures.
Calculating Capital Gains Tax
Capital Gains Tax applies when you dispose of crypto. The first step in calculating CGT is calculating the cost base, which includes the purchase price and any eligible transaction fees.
Cost Base = Purchase Price + Transaction Fees
Once the cost base is determined, the capital gain or loss is calculated by comparing it to the disposal value.
Capital Gain or Loss = Disposal Value − Cost Base
Use KoinX’s profit calculator to calculate gains, losses, and long term CGT discounts accurately
Approved Cost Basis Methods in Australia
The cost basis method you choose affects how capital gains and losses are calculated on crypto disposals. In Australia, investors can select from ATO approved methods if they can clearly identify each unit purchased, while traders must follow business trading stock rules.
First In First Out (FIFO)
FIFO assumes the first crypto units you acquire are the first ones you dispose of. This method is widely accepted and commonly used by Australian investors.
Example:
You buy BTC at 20,000 AUD and later buy more at 30,000 AUD. If you sell one BTC, FIFO treats the 20,000 AUD unit as sold first.
Last In First Out (LIFO)
LIFO assumes the most recently acquired units are disposed of first. This method may reduce or increase gains depending on price movements.
Example:
You buy ETH at 1,800 AUD and later at 2,600 AUD. Selling one ETH under LIFO uses the 2,600 AUD purchase as the cost base.
Highest In First Out (HIFO)
HIFO assumes the crypto unit with the highest cost base is sold first. This method can reduce taxable gains when prices fluctuate.
Example:
You buy SOL at 40 AUD and later at 75 AUD. Under HIFO, selling one SOL uses the 75 AUD unit as the cost base.
Average Cost Basis (ACB)
Average Cost Basis uses the average price of all units held. This method has restrictions and is not always permitted unless specific conditions are met.
Example:
You buy ADA at 1.20 AUD and later at 1.80 AUD. The average cost base per unit becomes 1.50 AUD.
Trading Stock Rules for Traders
If you are classified as a trader, crypto is treated as trading stock. FIFO or average valuation rules apply under business income tax laws, not capital gains rules.
Note: When KoinX calculates your crypto taxes, FIFO is applied by default. You can change the cost basis method to other ATO approved options directly from the settings if your records allow it.
How To Report Crypto Taxes in Australia?
Once your crypto income and capital gains are calculated, the next step is reporting them correctly to the ATO. Whether you are filing with myTax or using paper forms, the reporting process depends on how your crypto activity is classified.
Forms to File to Report Crypto Taxes in Australia
You can file your crypto taxes in Australia using two different methods:
Method 1: Online Using myTax Website
Once you or your accountant has finalised your crypto tax calculations, the easiest way to lodge your return is online through myTax, available via your myGov account. myTax allows you to report both crypto income and capital gains in the relevant sections while submitting your return electronically.
Method 2: Offline Using Paper Mode
If you choose to file your crypto taxes using paper forms, each type of crypto activity must be reported in the correct form and section.
Tax Return for Individuals (NAT 2541)
Crypto income must be reported at Question 2 of the Tax Return for Individuals form. This includes income from staking, mining, referrals, payments received in crypto, and similar earnings.
Taxpayer’s Declaration
For crypto disposals, select YES at Question 1 of the Taxpayer’s Declaration to confirm that you have capital gains or losses to report for the year.
Capital gains and losses are reported at Question 18 of the supplementary section.
- Report capital gains under 18H Current year capital gains
- Report carried forward losses under 18V Net capital losses carried forward
- The final taxable amount is shown at 18A Net capital gain
If your total capital gains for the year exceed 10,000 AUD, you must also complete and attach a Capital Gains Tax Schedule when lodging your return.
Records to Keep To File Crypto Taxes in Australia
How To Legally Lower Crypto Taxes in Australia?
Keeping accurate records is essential to calculate gains, losses, and income correctly for each crypto asset.
- Receipts for buying, transferring, or disposing of crypto
- Dates of every transaction
- Purpose of each transaction and counterparty wallet address
- Exchange transaction histories
- Crypto values in AUD at the time of each transaction
- Agent, accountant, and legal cost records
- Digital wallet records and access details
- Software expenses related to tax reporting
Each crypto asset is treated as a separate CGT asset, so detailed record keeping is critical for compliance.
How To Legally Lower Crypto Taxes in Australia?
You cannot avoid crypto tax obligations in Australia, but you can legally reduce how much tax you pay with proper planning. The key is understanding which deductions, concessions, and timing strategies the ATO allows, then applying them correctly before the end of the financial year.
Capital losses from crypto disposals can be used to offset capital gains from crypto, shares, or property. Trading and network fees can also be included in your cost base, reducing taxable gains. Losses that cannot be used in the current year can be carried forward indefinitely.
Deduct Crypto Mining Expenses Where Applicable
If your mining activity qualifies as a business rather than a hobby, you may deduct eligible expenses such as electricity, equipment, and software costs. These deductions reduce taxable income, but they are not available to hobby miners.
Hold Crypto for 12 Months to Access the CGT Discount
Investors who hold crypto for more than 12 months before disposal may qualify for the 50% Capital Gains Tax discount. This can significantly reduce the taxable portion of long term gains.
Donate Crypto to a Deductible Gift Recipient
Donating crypto to a registered Deductible Gift Recipient allows you to claim a tax deduction equal to the market value at the time of donation. Any associated capital gain is disregarded.
Claim Eligible Tax Preparation Expenses
Costs related to managing your tax affairs, including crypto tax software subscriptions and accountant fees, may be deductible. These deductions directly reduce your taxable income for the year.
Alert: Watch Out for ATO Warning Letters
The Australian Taxation Office has increased its enforcement efforts around crypto reporting. In recent years, hundreds of thousands of taxpayers have received warning letters or prompts through myTax asking them to review and amend previously lodged returns.
The ATO now matches exchange data against tax returns to identify underreported activity. As per the official press release, failing to declare crypto gains can result in penalties of up to 75% of the unpaid tax, plus interest. Many investors received similar notices again in 2023, highlighting the importance of accurate and complete reporting.
How KoinX Can Help You With Crypto Taxes in Australia?
Tracking crypto transactions across exchanges, wallets, and blockchains can quickly become confusing, especially when Australian tax rules treat income and disposals differently. Missed transactions or incorrect classifications often lead to reporting errors. KoinX helps Australian investors and traders calculate crypto taxes accurately by applying ATO rules and turning complex transaction histories into clear, reliable tax reports.
Seamless Integration
KoinX connects with 800+ blockchains, wallets, and Australian exchanges to automatically fetch your complete transaction history. This removes the need for manual uploads and ensures no trade, transfer, or reward is left out when calculating your crypto tax position.
Accurate Preview of Tax Liabilities
KoinX gives you a clear preview of capital gains and income before filing. By reviewing each transaction in sequence, you can identify errors early and understand how different disposals contribute to your final tax figures.
Auto Classification of Transactions
All transactions are automatically categorised into types such as trades, transfers, staking rewards, airdrops, and income. This saves time and helps you review category wise gains and income without manually sorting thousands of entries.
ATO Compliant Tax Reports
KoinX generates tax reports aligned with Australian tax rules for both investors and traders. It supports capital gains, income from staking, mining, airdrops, and other taxable activities, helping you report figures in a format that matches ATO expectations.
Safe and Secure
KoinX uses strong encryption and security controls to protect your data. Your transaction history and personal information remain private, ensuring your identity and financial details are handled with strict security standards at all times.
Portfolio Insights
With KoinX, you can view your crypto activity across chains in one place. It provides a clear picture of current holdings, past investments, and portfolio allocation, making it easier to understand how each transaction impacts your overall tax outcome.
Start using KoinX today to calculate your crypto taxes in Australia with clarity and confidence. Get accurate ATO-ready reports, reduce errors, and stay compliant without manual tracking.
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Conclusion
Crypto taxation in Australia covers a wide range of activities, from trading and investing to staking, mining, DeFi, NFTs, and everyday spending. Understanding how the ATO treats each transaction type helps you report income correctly, apply Capital Gains Tax where required, and use available deductions and concessions without risking penalties.
Managing this level of detail across multiple wallets and platforms can be time-consuming. KoinX simplifies the process by tracking transactions, applying Australian tax rules accurately, and generating reliable tax reports. Using KoinX allows you to stay compliant, reduce errors, and file your crypto taxes with confidence.
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Frequently Asked Questions
Can You Claim Crypto Losses On Taxes In Australia?
Yes. Crypto capital losses can be used to offset capital gains from crypto, shares, or property. If losses exceed gains, they can be carried forward indefinitely. However, net capital losses cannot be used to reduce salary or other ordinary income reported to the Australian Taxation Office.
Is There A Bitcoin Tax In Australia?
There is no separate Bitcoin tax. Bitcoin is treated as property, not currency. Selling, swapping, gifting, or spending Bitcoin can trigger Capital Gains Tax, while Bitcoin earned through work, staking, mining, or rewards is taxed as income at market value when received.
How Long Can You Hold Crypto To Avoid Taxes?
You cannot avoid tax by holding crypto indefinitely. Tax is only triggered when a disposal occurs. However, if you hold crypto for more than 12 months before disposal, eligible individuals can reduce the taxable capital gain by 50% under long term CGT rules.
Do I Need To Report Crypto If I Didn't Sell ATO?
If you only bought and held crypto without selling, swapping, spending, or earning income, there is usually nothing to report. However, receiving crypto through staking, mining, airdrops, or payments must still be reported as income even if no sale occurred.
What Is The 6 Year Rule For Capital Gains Tax In Australia?
The 6 year rule does not apply specifically to crypto taxation. It is mainly linked to property CGT exemptions. For crypto, tax outcomes depend on disposal events, holding period, and record keeping, not a fixed 6 year ownership timeframe.
Is Australia A Crypto-Friendly Country?
Australia allows legal ownership and trading of crypto with clear tax rules. While the regulatory approach is strict on reporting and compliance, the framework provides certainty for investors and businesses. This balance makes Australia regulated rather than restrictive for crypto participation.