Yes — swapping one cryptocurrency for another is a taxable event in Australia. The ATO treats a crypto-to-crypto swap as two simultaneous transactions: a disposal of the crypto you gave up (triggering a CGT event) and an acquisition of the crypto you received (establishing a new cost base). You do not need to receive Australian dollars for a tax event to occur.
Why Swaps Are Taxable
The ATO’s position is that cryptocurrency is a CGT asset. Any change in ownership of a CGT asset — including exchanging it for a different crypto asset — is a disposal. The fact that you received another cryptocurrency (rather than AUD) instead of cash does not change the tax analysis.
This applies to:
- Swapping BTC for ETH (or any direct coin swap)
- Trading on a centralised exchange (CoinSpot, Swyftx, Binance)
- Trading on a decentralised exchange (Uniswap, SushiSwap, PancakeSwap)
- Using DeFi protocols that exchange one token for another
How the CGT Calculation Works for a Swap
When you swap crypto, the proceeds are the AUD market value of the crypto you received at the time of the swap.
$$\text{Capital gain (or loss)} = \text{Market value of crypto received (AUD)} - \text{Cost base of crypto given up (AUD)}$$
And simultaneously, you acquire new crypto with a cost base equal to the AUD market value of what you received.
Worked Example — BTC to ETH Swap
| Step | Detail |
|---|---|
| January 2024 | Bought 0.5 BTC for AUD $20,000 (cost base = $20,000) |
| November 2024 | Swap 0.5 BTC for 8 ETH when BTC is worth AUD $45,000 |
| Disposal of BTC | Proceeds = $45,000 (market value); Cost base = $20,000; Gain = $25,000 |
| Held BTC for < 12 months | No CGT discount; full $25,000 is assessable |
| Acquisition of ETH | New cost base = $45,000 (market value at acquisition) |
If the BTC had been held for more than 12 months, the 50% CGT discount would apply to the $25,000 gain.
DeFi Swaps — Same Rules Apply
Decentralised finance (DeFi) swaps on protocols like Uniswap or 1inch are treated identically to centralised exchange swaps. The difficulty with DeFi is that:
- Prices are harder to verify — you need the AUD value at the exact time of the transaction
- Gas fees add complexity — gas fees paid in ETH to execute the swap are themselves a disposal of ETH (a separate CGT event)
- Records are harder to gather — you need blockchain explorer data rather than exchange records
Stablecoin Swaps
Swapping crypto for a stablecoin (USDT, USDC, DAI) is also a taxable event. Even though stablecoins aim to maintain a 1:1 USD peg, the ATO treats the swap as a disposal of the original crypto. The “proceeds” are the AUD value of the stablecoins received.
Similarly, swapping a stablecoin for another crypto (e.g., USDT → SOL) is also a disposal of the stablecoin (which may generate a minor gain or loss if the USDT cost base differs from its AUD market value).
Liquidity Pool Contributions and Withdrawals
Depositing crypto into a liquidity pool (e.g., providing ETH/USDC liquidity on Uniswap) may be a disposal of the original tokens and an acquisition of LP tokens. Withdrawing from the pool may be a disposal of LP tokens and an acquisition of the underlying crypto. This area has limited specific ATO guidance — the general CGT principles apply, but the practical complexity is significant. A tax agent experienced in DeFi is advisable.
Keeping Records for Swaps
For every swap, record:
- Date and time
- Crypto disposed of (amount and type)
- AUD value of the crypto disposed of at that exact time
- Crypto received (amount and type)
- AUD value of crypto received at that exact time
- Exchange/protocol used
- Transaction fees (in AUD)
Crypto tax software (Koinly, CryptoTaxCalculator) can automate most of this if connected to your wallets and exchanges.
Related Articles
- Crypto Tax Australia — ATO Rules Explained
- How to Calculate and Report Crypto Tax
- CGT on Crypto
- Tax on Investments hub
- Taxes hub
Frequently Asked Questions
What if I can’t find the AUD price of the crypto I swapped at the exact time of the transaction? Use the closest available price from a reputable exchange or price data provider (CoinGecko, CoinMarketCap). Document your source and methodology. The ATO expects a reasonable and consistent approach — it does not require exact to-the-second pricing, but it should be close to the transaction time.
If I lose money on a swap, can I use that loss? Yes. A crypto-to-crypto swap that results in a capital loss can be used to offset other capital gains — from crypto, shares, property, or any other CGT asset. Losses that exceed gains in the current year carry forward to future years.
Is wrapping a token (e.g., ETH to WETH) a taxable event? This is an unsettled area. Wrapping ETH to WETH (or BTC to WBTC) arguably results in an exchange of one asset for another — which the ATO’s general principles would treat as a disposal. However, the economic reality is that the asset is functionally the same. There is no specific ATO ruling on token wrapping as at the date of publication. Conservative treatment is to treat it as a taxable event; seek advice from a tax agent experienced in crypto.
This article provides general tax information. Cryptocurrency and DeFi tax is a complex and rapidly evolving area. For advice tailored to your situation, speak with a registered tax agent experienced in crypto. Find one through the Tax Practitioners Board register.