Disclaimer: This page is for general information purposes only and should not be used as a substitute for consultation with tax professionals. By continuing on this page, you hereby acknowledge and agree that Crypto.com has not provided any tax or financial product advice, and that it is your responsibility to seek out separate professional advice from a holder of an Australian Financial Services Licence before making financial related decisions. Crypto.com has made no representations or guarantees about the accuracy, completeness, or applicability of any information on this page. Further, you acknowledge and agree that any examples or calculations provided on this page are for illustrative purposes only and may not apply to you or your use of any of Crypto.com’s services, notwithstanding any apparent similarities between the fact patterns presented in such examples and those relevant to your individual circumstances. Crypto.com is not responsible for any third-party material referenced on this page, and the inclusion of any third-party material on this page should not be construed as Crypto.com’s support of, agreement with, or attestation to the accuracy or applicability of such material. The general tax guidance on Australian Taxation Office (ATO) does not address all the various cryptocurrency transactions and resulting tax implications. Guidance from the ATO may be supported or challenged by the Australian courts.

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Table of contents:

Is cryptocurrency taxable?

How is my cryptocurrency taxed?

When do I need to report my crypto taxes?

Cryptocurrency capital gains tax rate

What are crypto capital losses?

How do I file crypto tax reports?

Cost Basis Methods

Tax-Free Crypto Transactions

Tax Rules on other Crypto Transactions

What are transaction fees in crypto transactions?

Other Tax Considerations

Is cryptocurrency taxable?

Yes, cryptocurrency is taxable in a variety of circumstances. Cryptocurrency is generally treated as property for Australian tax purposes. The taxable events of crypto transactions are generally characterized as either capital gain (or loss) or ordinary income, depending on the type of transaction. In general, you may need to report a transaction on your Australian individual income tax return when you dispose of cryptocurrency. In the website of ATO, disposition of crypto means as follows:

  • Sell or gift cryptocurrency

  • Trade or exchange cryptocurrency, including disposing of one cryptocurrency to get another cryptocurrency

  • Convert cryptocurrency to fiat currency (a currency established by government regulation or law), such as Australian dollars

  • Use cryptocurrency to obtain goods or services

How is my cryptocurrency taxed?

Cryptocurrency could be subject to Income Tax or Capital Gains Tax. If you earn taxable crypto income, it may be taxed as ordinary income at its fair market value on the date you receive it.

If you are a typical crypto investor, who treats trading cryptocurrency as a capital asset, you may pay capital gain tax on the capital gain made from disposition of your crypto asset. In such a scenario, the taxable income would be calculated based on the net proceeds (i.e. proceeds less any selling transaction fee) less the adjusted cost basis of the crypto. ATO gives a 50% discount on the capital gain if you hold the coins more or equal to 12 months before disposal. Any income from disposition is considered as capital gain, of which is subject to tax.

On the other hand, if you are running a crypto business or participating in transactions that constitute “business activities” , the income from disposition would be considered as business income/loss.

Note: Crypto.com Tax does not support business intent transactions currently. Therefore, this may not be the right tool for you if your crypto transactions constitute business activities as opposed to personal transactions. We do not purport to make this determination, please consult your independent advisors regarding your circumstances.

When do I need to report my crypto taxes?

You need to report your taxable crypto transactions on your Income Tax return for individuals (form NAT 2541). Subject to any applicable extensions, the income tax filing deadline is the end of October every year if you lodge the tax return personally. The deadline would be 15 May if you lodge the tax return with a tax agent. For more information, you may refer to the ATO website.

Cryptocurrency capital gains tax rate

Your capital gains will be taxed at the same rate as your Individual Income Tax rate. However, you'll only pay tax on half of your capital gain if you own the asset for 12 months or more. Please refer to the ATO website for more details about the income tax rates.

What are crypto capital losses?

In general, capital losses mean that the amount you spent when you bought or received the crypto (its adjusted cost basis) exceeds the proceeds you received for its sale. You do not pay tax on capital losses, but you can offset your capital gains with those losses.

If your capital losses exceed your capital gains, you cannot deduct the net capital loss from your other income but you may carry forward the unutilized losses to offset your capital gains in future tax years. There is no time limit on how long you can carry forward the unutilized losses, but capital losses must be used at the first opportunity. For more information on this, please visit the ATO website.

How do I file crypto tax reports?

Crypto.com Tax* is a user-friendly tax product to generate tax reports for tax filing. You may follow below steps to finish the crypto tax filing:

  1. Register a FREE account in Crypto.com Tax

  2. Import your crypto transactions in Crypto.com Tax

Crypto.com Tax supports over 30 popular exchanges and wallets. Apart from the supported exchanges/ wallets, you may also add your transactions manually.

  1. Generate tax reports and check your tax summary

You can export your reports in multiple formats (e.g. Capital gain/loss report and Transaction history report) at no cost.

  1. Complete capital gains tax schedule for tax filing purpose

After generating the Capital gain/loss report, you may use it to complete the capital gains tax schedule and attach it with your individual tax return (NAT 2541) for tax filing.

*Crypto.com Tax does not provide tax or financial product advice and is not intended to be a substitute for consultation with your own tax or financial professional.

Cost Basis Methods

When you have multiple crypto investments and transactions, cost basis methods dictate the way you calculate the cost basis of your crypto. Critically, cost basis methods affect how your capital gains are calculated.

The ATO does not restrict users to choose a particular cost basis method to calculate the taxes. Therefore, you can choose either First In First Out (FIFO), Last In First Out (LIFO) or Highest In First Out (HIFO) in Crypto.com Tax to calculate your own taxes.

You should use the method that is suggested by the local tax authority or your independent tax professional and apply the method consistently. If you want to change your cost basis method, please consult with your tax professional first. Please see our FAQ for more details on different cost basis methods.

Tax-Free Crypto Transactions

Is buying crypto taxable?

Crypto purchases with fiat money (e.g. AUD --> BTC) are not subject to tax; however, it’s extremely important to keep track of the acquisition cost (including associated fees), as it becomes the cost basis of the crypto and will be used for calculating capital gains/losses for subsequent taxable events (i.e., dispositions / sales).

Do I pay tax when transferring crypto between my own accounts?

Generally, transferring crypto between your own accounts is tax-free when the associated fee is in fiat.

However, you may need to pay tax if the associated fee is in crypto as the difference between the fair market value (FMV) of the crypto disposed to settle the fee and its adjusted cost basis may result in capital gain/loss. See additional information on fees below.

Tax Rules on other Crypto Transactions

Is selling crypto taxable?

Sale of crypto for fiat currency (e.g. BTC --> AUD) is a taxable and reportable event. The capital gains/losses can be calculated by subtracting the cost basis and the associated fees from the proceeds. If you hold the coins for 12 months or more before the disposal, you will have a 50% discount from the capital gain.

Example:

You bought 10 ETH for AUD 10,000 on 1 Feb 2020 and then sold 5 ETH for AUD 10,000 on 2 Feb 2021.

Results:

Cost basis per coin: AUD 10,000/10 = AUD 1,000 per ETH

Proceeds: AUD 10,000

Total cost basis for 5 ETH: AUD 1,000 * 5 = AUD 5,000

Capital gain/loss: AUD 10,000 - 5,000 = AUD 5,000

Capital gain after discount: AUD 5,000 / 2 = AUD 2,500

Do I pay tax when trading one crypto for another?

Yes, exchanges of one crypto for another crypto (e.g. ETH --> BTC) are generally taxable and reportable events. The capital gains/losses can be calculated by subtracting the cost basis from the FMV of the coins you receive.

Example:

You bought 10 ETH for AUD 10,000 and then sold 5 ETH for 1 BTC. The FMV per BTC is AUD 12,000.

Results:

Cost basis per coin: AUD 10,000/10 = AUD 1,000 per ETH

Proceeds: AUD 12,000

Total cost basis for 5 ETH: AUD 1,000 * 5 = AUD 5,000

Capital gain/loss: AUD 12,000 - 5,000 = AUD 7,000

Do I pay tax when spending crypto?

Paying for goods and services with crypto generally results in a taxable event due to the disposition of the crypto. However, it may not be taxable when personal use asset exemption applies. You may refer to this section for more details. The capital gains/losses can be calculated by subtracting the cost basis from the FMV of the coins you spend.

Example:

You bought 10 ETH for AUD 10,000 and then paid 5 ETH for some services. The FMV per ETH is AUD 2,000.

Results:

Cost basis per coin: AUD 10,000/10 = AUD 1,000 per ETH

Proceeds: AUD 2,000 * 5 = AUD 10,000

Total cost basis for 5 ETH: AUD 1,000 * 5 = AUD 5,000

Capital gain/loss: AUD 10,000 - 5,000 = AUD 5,000

Is it taxable when gifting crypto to others?

Yes, sending a gift in crypto is generally taxable as it results in the disposition of the crypto. The capital gains/losses can be calculated by subtracting the cost basis from the FMV of the coins on the date of gifting.

When the crypto is ultimately sold by the recipient of the gift, the proceeds of disposition is the FMV on this date.

Example:

You bought 10 ETH for AUD 10,000 and then sent 5 ETH to friends as a gift. The FMV per ETH is AUD 2,000.

Results:

Cost basis per coin: AUD 10,000/10 = AUD 1,000 per ETH

Proceeds: AUD 2,000 * 5 = AUD 10,000

Total cost basis for 5 ETH: AUD 1,000 * 5 = AUD 5,000

Capital gain/loss: AUD 10,000 - 5,000 = AUD 5,000

Do I pay tax when donating crypto to charity?

Yes, it is generally taxable when you donate crypto to charity and results in capital gains/losses. If the payment is made directly to a not-for-profit organization which has “Deductible Gift Recipient Status” (DGR), it can be tax deductible. However, only a small number of Australian entities are DGRs, you can check here to see if the entity has DGR endorsement. In addition, it is required to keep the receipt issued by the DGR. You can also claim the deduction by using other records such as bank statements. Please refer to this webpage for more information.

The capital gains/losses can be calculated by subtracting the cost basis from the FMV of the coins on the date of donation, less amount or benefit received or receivable from the charity.

Example:

You bought 1 BTC for AUD 10,000 and then donated 1 BTC to a charity. The FMV per BTC is AUD 20,000.

Results:

Capital gain/loss: AUD 20,000 - 10,000 = AUD 10,000

Note: AUD20,000 may be tax deductible and should be reported as a donation.

Is swapping crypto taxable?

A token swap/migration occurs whenever an old coin is exchanged for a new coin (e.g. MCO converting to CRO). It is generally considered a taxable event which is similar to trading one cryptocurrency for another cryptocurrency for Australia tax purposes.

Moreover, if the associated fee is settled in crypto, there may be a difference between the FMV and adjusted cost basis of the crypto used to settle the fee, which may result in capital gain/loss. See additional information on fees below.

Example:

You bought 10 MCO for AUD 50 and then swapped 5 MCO to 20 CRO. The FMV per CRO is AUD 20.

Results:

Cost basis per coin: AUD 50/10 = AUD 5 per MCO

Proceeds: AUD 400

Total cost basis for 5 MCO: AUD 5 * 5 = AUD 25

Capital gain/loss: AUD 400 - 25 = AUD 375

Receiving cryptocurrency other than direct purchase or transfer

Is mining crypto taxable?

Crypto mining is generally not taxable at the time of receipt. However, you may be subject to capital gains/losses when the mined coins are disposed (i.e. sold). If the crypto is considered to be a capital asset (i.e. mining as a hobby), the cost basis of the coins are zero and the mining expenses (e.g. start-up cost, home office expenses) cannot be taken as a deduction to the resulting capital gain/loss.

The capital gain/loss is calculated by subtracting the cost basis from the FMV of the crypto on the date of disposition.

Example:

You received 10 ETH from mining where the FMV per ETH is AUD 10,000. You then sold 1 ETH for AUD 12,000.

Results:

Cost basis per coin: 0 per ETH (i.e. zero cost basis)

Proceeds: AUD 12,000

Capital gain/loss: AUD 12,000

How are forks being taxed?

Hard fork takes place when there is a split on the new crypto that you currently hold. Similar to mining, the new coins/tokens may be subject to capital gains/losses at dispositions and have a zero cost basis. The calculation of capital gains/losses is the same as mining. For more scenario cases, please refer to the session of Chain Split on the ATO website.

How are airdrops being taxed?

Airdrops are free coins you may receive from marketing campaigns or events.

In general, new coins from airdrops are taxable at the time of receipt. The FMV of the new coin when it is received will be treated as your ordinary income. These new coins may also be subject to capital gains/losses at dispositions. The cost basis of the received coins is equal to its FMV at the time of receipt. The calculation of capital gains/losses is the same as mining.

Do I pay tax when receiving crypto rewards?

You can get crypto rewards in several ways, e.g. stake/earn rewards and bonus, referral bonus.

In general, the reward income is taxable at the time of receipt. The FMV of crypto rewards received will be treated as your ordinary income. Also, you may be subject to capital gains/losses when you dispose the crypto rewards. The cost basis of the received coins is equal to its FMV at the time of receipt. The calculation of capital gains/losses is the same as mining.

Do I pay tax when receiving gifts in crypto?

Receiving a crypto gift is not taxable at the time of receipt. However, the received coins may be subject to capital gains/losses at dispositions. The cost basis of the received coins is the FMV of the coins on the date of receipt. The calculation of capital gains/losses is the same as mining.

Is it taxable when receiving crypto payment? (e.g. salary payment)

If you receive a crypto payment as a form of compensation, it may be considered as your employment income.

The FMV of received coins would be treated as part of your taxable employment income for that year and would be reportable on the Individual Income tax return - NAT 2541. Received coins from wages may be also subject to income tax withholding. See Schedule 1 – Statement of formulas for calculating amounts to be withheld for further details.

Each individual is responsible for calculating and reporting income on their individual tax return even if the payor (e.g., employer) has not supplied appropriate documentation. It is your responsibility to consult a tax professional to ensure you have fulfilled your tax obligations.

The FMV of the crypto received as compensation will be your cost basis for such crypto assets in the event of a future disposition.

Example:

You received 10 ETH as salary where the FMV per ETH is AUD 1,000. You then sold 5 ETH for 1 BTC where the FMV per BTC is AUD 12,000.

Results:

Proceeds: AUD 12,000

Total cost basis for 5 ETH: AUD 1,000 * 5 = AUD 5,000

Capital gain/loss: AUD 12,000 - 5,000 = AUD 7,000

Note: AUD 10,000 (10 ETH @ FMV of AUD 1,000 each) should be reported as income from wages/salaries at the time of receipt.

Do I pay tax when getting a rebate in crypto?

Note: In general, on the Crypto.com platform, you can only get rebates from certain credit card and staking transactions (as of the time of this article’s publication). Please see the Crypto.com terms and conditions for eligibility criteria and other details on rebates.

In cases of rebates associated with spending transactions (e.g., credit card spends), rebates (including any received in the form of crypto coin/token) generally are not taxable at the time of receipt. However, like other crypto, they are subject to capital gains/losses at disposition. The cost basis of the received coin/token is equal to the FMV at the time of receipt. The calculation of capital gains/losses is the same as mining.

Example:

You received 0.1 ETH from rebates where FMV per ETH is AUD 10,000. You then sold 0.1 ETH for AUD 1,200.

Results:

Proceeds: AUD 1,200

Cost basis per coin: AUD 10,000 per ETH

Total cost basis for 0.1 ETH: AUD 10,000 * 0.1 = AUD 1,000

Capital gain/loss: AUD 1,200 - 1,000 = AUD 200

How are the transaction costs on blockchain being taxed?

You may incur expenses when a blockchain transaction is approved/failed/canceled. For example, when a gas fee is charged due to a failed blockchain transaction.

These transaction costs may be subject to capital gains/losses. The capital gains/losses, where applicable, can be calculated by subtracting the cost basis from the FMV of the coins charged. The FMV of the coins should not be considered as an investment expense which is not tax deductible for Australian tax purposes.

Example:

You bought 2 ETH for AUD 2,000 and 0.1 ETH is charged due to a failed blockchain transaction where the FMV per ETH is AUD 1,500.

Results:

Proceeds (due to disposition of 0.1 ETH to cover the gas fee): AUD 1,500 * 0.1 = AUD 150

Cost basis per coin: AUD 2,000/2 = AUD 1,000

Total cost basis for 0.1 ETH: AUD 1,000 * 0.1 = AUD 100

Capital gain/loss: AUD 150 - 100 = AUD 50

How is margin trading of crypto taxed?

Margin trading of crypto would generally incur capital gain/loss in the following cases:

- Closing the position

- Payment of margin interest with crypto

- Forced sale of your collateral by exchanges (i.e. a margin call)

Crypto.com Tax does not support margin trading transactions at this moment. Please consult your tax advisor if you’re actively involved in margin trading.

What are transaction fees in crypto transactions?

Fees can show up in all kinds of cryptocurrency transactions and is often the most cryptic part when calculating taxes. The tax treatment of fees depends on whether the fees are incurred in taxable or non-taxable transactions. You may also need to consider if the transaction fee is paid in cryptocurrency.

How is transaction fee taxed in non-taxable events?

Typically in a non-taxable event (e.g. buying crypto), the FMV of the fee will be added to the cost basis of the resulting coins. Thus, in this example, the transaction fees you pay upon purchase will be considered as part of the cost basis if and when a disposition eventually happens and will reduce the capital gain.

However, transfer transactions generally are exceptions to the aforementioned mechanism. The fees associated with such transactions generally are not included in the cost basis and no deduction is available because its intention is to hold the crypto for investment purposes rather than disposition/acquisition of crypto.

Example 1:

You bought 10 ETH for AUD 10,000, with a purchase fee of AUD 100.

Results:

Cost basis per coin: AUD (10,000 + 100) / 10 = AUD 1,010 per ETH

Example 2:

You bought 10 ETH for AUD 10,000 in account A. You then transferred 5 ETH from account A to account B, with a transfer fee of AUD 50.

Results:

Cost basis per coin in account A: AUD 10,000 / 10 = AUD 1,000 per ETH

Cost basis per coin in account B: AUD (1,000 * 5 ) / 5 = AUD 1,000 per ETH

How are transaction fees taxed in taxable events?

In a taxable event (e.g. selling / trading crypto), the FMV of the fee is generally considered to be an expense, which is typically included in the cost basis and deducted from the proceeds when calculating capital gain/loss.

Example:

You bought 10 ETH for AUD 10,000. You then sold 5 ETH for AUD 10,000, with a selling fee of AUD 100.

Results:

Proceeds: AUD 10,000

Cost basis per coin: AUD 10,000/10 = AUD 1,000 per ETH

Total expense: AUD 100

Total cost basis for 5 ETH: AUD 1,000 * 5 + AUD 100 = AUD 5,100

Capital gain/loss: AUD 10,000 - 5,100 = AUD 4,900

What if the transaction fee is in cryptocurrency?

When the transaction fee is in crypto, it should be valued at FMV and would generally result in a capital gain/loss separately as it would be deemed a disposition of capital property. Therefore, in taxable events, your transaction may result in 2 separate reportable capital gains/losses, each of which should be separately listed in your transaction records.

For non-taxable events, you would just need to calculate the capital gain/loss from the fee. Note that in a transfer transaction, the FMV of the fee cannot be added to the resulting coin's cost basis.

Example 1: Buying crypto

You bought 10 ETH for AUD 10,000. You then bought 5,000 CRO for AUD 1,000 with a transaction fee of 0.1 ETH. Assume the ETH price has gone up to AUD 2,000 on the day of buying CRO.

Results:

Cost basis per ETH: AUD 10,000/10 = AUD 1,000 per ETH

Transaction fee of 0.1 ETH: AUD 2,000 * 0.1 = AUD 200

Cost basis per CRO: AUD (1,000 + 200)/5,000 = AUD 0.24 per CRO

Capital gain/loss from the fee = AUD (2,000 - 1,000) * 0.1 = AUD 100

Example 2: Transferring crypto

You bought 10 ETH for AUD 10,000 in account A. You then transferred 5 ETH from account A to account B, with a transfer fee of 0.1 ETH. Assume the ETH price has gone up to AUD 2,000 on the day of transfer.

Results:

Cost basis per coin in account A: AUD 10,000/10 = AUD 1,000 per ETH

Cost basis per coin in account B: AUD (1,000 * 5 )/5 = AUD 1,000 per ETH

Capital gain/loss from the fee = AUD (2,000 - 1,000) * 0.1 = AUD 100

Example 3: Selling crypto

You bought 10 ETH for AUD 10,000 and then sold 5 ETH for AUD 10,000, with a selling fee of 0.1 ETH. We know the ETH price is AUD 2,000 on the day of sale.

Results:

Proceeds: AUD 10,000

Cost basis per coin: AUD 10,000/10 = AUD 1,000 per ETH

Total expense: AUD 2,000 * 0.1 = AUD 200

Total cost basis for 5 ETH: AUD 1,000 * 5 + AUD 200 = AUD 5,200

Capital gain/loss on transaction: AUD 10,000 - 5,200 = AUD 4,800

Capital gain/loss on fee: AUD (2,000 - 1,000) * 0.1 = AUD 100

Total capital gain/loss: AUD 4,800 + 100 = AUD 4,900

Other Tax Considerations

Do I need to keep records of crypto transactions?

It is important to keep track of your crypto transactions as well as the market value of the crypto at critical junctures throughout these activities. The ATO provides general guidance that a taxpayer should maintain good records and details for each crypto asset for five years which is essential for meeting your tax obligations. You should keep records of receipts and sales documenting the date of transactions, price and fair market value of crypto, etc.

If you are a Crypto.com Tax user, it's easy to keep proper records of your crypto activities by simply syncing your wallets/exchanges or importing your transactions on Crypto.com Tax.

What is a personal use asset?

Cryptocurrency itself can qualify as a personal use asset in limited circumstances, and may consequently be exempt from capital gains tax. Crypto may be a personal use asset if it is acquired and kept mainly for personal use or consumption. However, it may not be a personal use asset if it is acquired, kept or used as an investment in the course of carrying on a business.

Only capital gains made from personal use assets acquired for less than $10,000 may be disregarded for capital gains tax purposes. All capital losses made on personal use assets are disregarded.

For example, where an individual acquires crypto to purchase airline tickets less than $10,000 on the same day, the crypto may be considered as a personal use asset. Capital gain may not be recognized when you pay for the tickets.For Crypto.com Tax users, you may manually change the net worth of the transaction to zero to remove the gain for this case. Please refer to our FAQ for more details on how to set net worth for a transaction.

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