The ATO’s position on cryptocurrency is clear: crypto is not currency and not a personal use asset in most cases — it is a Capital Gains Tax (CGT) asset. Every time you sell, swap, spend, or gift cryptocurrency, you have a taxable event. The CGT rules that apply to shares also apply to crypto — including the 50% discount for assets held over 12 months and the ability to offset losses against gains.
The ATO’s Core Position on Crypto
The ATO has published detailed guidance on cryptocurrency and monitors exchange data closely. Key principles:
- Crypto is a CGT asset — not money, not a foreign currency
- Every disposal is a taxable event — selling for AUD, swapping one coin for another, spending crypto, or gifting it
- Simply holding crypto is not taxable — gains are only realised when you dispose
- Mining, staking, and airdrops generate ordinary income — not capital gains, in most cases
- The ATO receives data from Australian exchanges — including CoinSpot, Swyftx, Independent Reserve, and others
What Is a Taxable Event?
| Action | Taxable event? |
|---|---|
| Selling crypto for AUD | ✅ Yes — CGT event |
| Swapping crypto for another crypto (e.g., BTC → ETH) | ✅ Yes — disposal at market value |
| Spending crypto on goods/services | ✅ Yes — disposal at market value |
| Gifting crypto to another person | ✅ Yes — disposal at market value |
| Transferring crypto between your own wallets | ❌ No — no change of ownership |
| Buying crypto with AUD | ❌ No — acquisition, not disposal |
| Staking rewards received | ✅ Yes — ordinary income when received |
| Mining rewards received | ✅ Yes — ordinary income when received |
| Airdrops received | Usually ✅ — ordinary income (case-specific) |
| Hard fork tokens received | ✅ Yes — ordinary income at market value |
How Crypto CGT Is Calculated
$$\text{Capital gain (or loss)} = \text{Proceeds} - \text{Cost base}$$
Proceeds: The AUD value at the time of disposal. For swaps, this is the AUD market value of what you received.
Cost base: What you paid to acquire the crypto — in AUD — including any exchange fees paid at acquisition.
The 50% CGT Discount
If you held the cryptocurrency for more than 12 months before disposal, you are entitled to the 50% CGT discount (as an individual). This means only half the gain is included in your assessable income.
Example:
- Bought 1 Bitcoin for $30,000 (including exchange fees)
- Held for 18 months
- Sold for $75,000
- Gross gain: $45,000
- After 50% discount: $22,500 included in assessable income
- At 34.5% marginal rate: approximately $7,763 in additional tax
Crypto Losses
If you sell or swap crypto at a loss, you have a capital loss. Capital losses:
- Offset capital gains in the same year (including gains from other assets like shares or property)
- Carry forward indefinitely if not fully used
- Cannot offset ordinary income (salary, business income, staking rewards)
Ordinary Income from Crypto
Some crypto activities generate ordinary income rather than capital gains:
| Activity | Tax treatment |
|---|---|
| Staking rewards | Ordinary income at the AUD market value when received |
| Mining income (hobby/business) | Ordinary income (or business income) |
| Airdrop tokens | Generally ordinary income at receipt value |
| Crypto received as payment for services | Ordinary income at market value |
| DeFi lending interest | Ordinary income |
Once you receive staking rewards (for example), they have an income cost base equal to the value when received. When you later sell those tokens, any further gain or loss is a separate CGT event.
What the ATO Already Knows
Australian cryptocurrency exchanges are required to report customer data to the ATO under the data-matching program. The ATO receives:
- Account details (names, addresses, identification)
- Transaction details (buy/sell transactions, amounts, timestamps)
The ATO uses this data to cross-reference with lodged tax returns and identify taxpayers who have not reported crypto income. If you have used an Australian exchange, assume the ATO has your transaction history.
Record-Keeping Requirements
You must keep records for all crypto transactions for 5 years after you lodge the relevant tax return. Records should include:
- Date and time of each transaction
- Value in AUD at time of transaction
- What was exchanged (amount and type of crypto)
- Exchange used
- Transaction fees paid
- Any wallet addresses used
Many crypto tax tools (such as Koinly, CoinTracker, or CryptoTaxCalculator) can import transaction data from exchanges and wallets and generate an Australian-compliant CGT report.
Related Articles
- How to Calculate and Report Crypto Tax
- Crypto to Crypto Swaps — Are They Taxable?
- Capital Gains Tax Explained
- CGT on Crypto
- Tax on Investments hub
- Taxes hub
Frequently Asked Questions
Is crypto tax different if I’m a day trader? If your level of trading activity and profit motive means you are operating a business of trading cryptocurrency, your gains may be taxed as ordinary income (not capital gains), meaning the 50% CGT discount does not apply. The ATO considers frequency of trading, intention, and the business-like nature of your activity. Most retail investors are not classified as business traders.
What if I lost money on crypto — do I still need to report it? Yes. Capital losses from crypto should be reported — they can be used to offset other capital gains, including any future crypto gains or gains from shares. Reporting losses correctly ensures you can carry them forward.
Does the ATO know about offshore exchanges like Binance or Kraken? The ATO can obtain data from overseas exchanges through international tax information exchange agreements. While the data may not be as automatic as domestic exchange reporting, the ATO has been actively pursuing cryptocurrency data from offshore platforms. The safest approach is to report all crypto activity regardless of which exchange was used.
This article provides general tax information. Cryptocurrency tax is a complex and 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.