How Crypto is Taxed
In Australia, cryptocurrency is treated as property, not currency. This means every disposal (selling, trading, swapping, or spending crypto) is a capital gains tax (CGT) event. You must calculate the gain or loss on each transaction based on the difference between your purchase price and the disposal price in AUD at the time of each transaction.
CGT Events That Trigger Tax
- Selling crypto for AUD or any fiat currency
- Trading one crypto for another (e.g., BTC to ETH)
- Using crypto to buy goods or services
- Gifting cryptocurrency to another person
- Converting crypto to stablecoins
Simply buying and holding crypto is NOT a taxable event. Transferring between your own wallets is also not taxable (but keep records to prove it).
The 12-Month Discount
If you hold crypto for more than 12 months before selling, you get a 50% CGT discount (same as shares and property). This means only half of your profit is added to your taxable income. This is a significant incentive to hold long-term rather than trade frequently.
DeFi and NFTs
DeFi activities like staking, liquidity provision, and yield farming create additional tax complexity. Staking rewards are generally treated as income at the time of receipt. NFT sales are also subject to CGT. The ATO has been increasing its focus on DeFi and has data-matching programs with Australian exchanges to identify unreported crypto income.
Record Keeping
The ATO requires you to keep records of every crypto transaction for at least 5 years. Records should include the date, amount in AUD, what was traded, exchange used, and wallet addresses. Use crypto tax software like Koinly, CryptoTaxCalculator (Australian-made), or Syla to automatically import transactions from exchanges and calculate your obligations. Most integrate with Australian exchanges like CoinSpot, Swyftx, and Independent Reserve.
Reporting on Your Tax Return
Report crypto gains and losses in the Capital Gains section of your tax return (myTax). The ATO receives data directly from Australian exchanges, so do not assume your transactions are invisible. Penalties for failing to report crypto income can be severe, including fines and interest charges.