Australia’s tax deadline is rapidly approaching, and while the tax code is relatively straightforward, dealing with crypto assets can be a headache. For example, if you’re using myTax, you must look up every crypto transaction you made for the year and input them individually. Fortunately, there are several ways to streamline the process.
In this guide, you’ll learn everything you need to know about the Australian tax deadline and what crypto traders, investors, and enthusiasts need to know.
Australia’s Tax Year & Deadline
The Australian tax year, also known as the fiscal year, runs from July 1 to June 30. And the deadline to file your taxes with the Australian Tax Office (ATO) is October 31. So, for the fiscal year ending June 30, 2023, the deadline to lodge a tax return is October 31, 2023.
If you use a registered tax agent, you can extend your filing deadline to as late as May 15 (e.g., May 15, 2024, for this year’s taxes). However, you must register with a tax agent by October 31 to qualify for an extended tax deadline, so don’t wait if you need time.
If you miss the deadline, you may have to pay a fine of one penalty unit, or $222, for failing to pay on time. The penalty increases by one penalty unit every 28 days that it’s overdue for a maximum of five penalty units (more on penalties later).
Australia’s Crypto Taxes
The Australian Tax Office (ATO) began offering specific tax guidance for crypto assets on December 17, 2024, with the publication of its general guidance on cryptocurrencies. And in 2019, the ATO began collecting records from Australian cryptocurrency designated service providers (DSPs) to enforce tax obligations.
The ATO’s general crypto tax guidelines include the following:
- Crypto as Property: Crypto assets are considered property subject to Capital Gains Tax (CGT). You must report any capital gain resulting from the sale or disposal of crypto assets on your tax return – even when it’s a crypto-to-crypto transaction.
- Personal Use Exemption: If you use crypto assets to purchase goods or services for personal use, you may be exempt from Capital Gains Tax if your total spend is less than $10,000. However, you should be ready to prove that they were for personal use.
- Mining & Trading: Crypto assets obtained through mining or other business activities must be reported as income (rather than capital gains) based on the crypto asset’s value at receipt. In addition to income tax, you may owe Capital Gains Tax on any appreciation from that cost basis before its sale.
Keeping Accurate Records
Recordkeeping is essential to report your crypto transactions properly. If your records aren’t well-kept, you could miss transactions and report an inaccurate capital gain or loss. Therefore, keeping records by exporting transactions from exchanges or keeping accurate records of wallet transactions is critical.
Some critical data points to collect include:
- The date of each transaction.
- The crypto asset’s value in AUD at the time of the transaction.
- The purpose of the transaction.
- The details of the other party involved.
If you want to avoid creating and maintaining manual records, ZenLedger can help aggregate these transactions from multiple wallets and exchanges into a single, convenient spreadsheet. That way, you can upload the spreadsheet to the ATO’s myTax without manually entering each transaction, minimizing the potential for costly errors.
The most common misconception about crypto taxes is that it’s only taxable when converted into Australian dollars – but this is not the case. Even crypto-to-crypto transactions are taxable; you must report them on your taxes. If you fail to report these transactions, you could incur fines and penalties for filing inaccurate reports.
Another misconception is that you don’t need to report crypto earnings if you’re below the tax-free threshold. You must report all crypto transactions regardless of your total income. And if you have a capital loss, you should report it because it could save you money.
Fines & Penalties
The Australian Tax Office imposes several penalties if you fail to file on time, pay on time, make misleading statements, or keep inaccurate records. Unfortunately, making mistakes that lead to penalties is easier when transacting with crypto assets. Therefore, it’s worth reviewing the penalties should you run into issues.
The primary penalties include:
- Failure to Lodge on Time: If you don’t lodge your tax return by the due date, you may be subject to the Failure to Lodge (FTL) penalty. This fee is calculated at the rate of one penalty unit for each period of 28 days or part thereof that the document is overdue, up to a maximum of five penalty units.
- Failure to Pay on Time: If you owe tax and don’t pay by the due date, the ATO can apply a general interest charge (GIC) to the outstanding amount. The GIC is computed daily based on the shortfall amount and includes compounding interest.
- False or Misleading Statements: If you make false or misleading statements, the ATO may impose a penalty ranging from 25% to 75% of the shortfall, depending on whether the misleading statement was a mistake or intentional.
- Failure to Keep Records: The law requires you to keep records relating to your income and expenses. You could be penalized if you fail to keep the right tax records. And like the previous penalty, the amount depends on the severity and impact of the failure.
The Bottom Line
Crypto assets may be relatively new to the scene in Australia, but the Australian Tax Office (ATO) has already made its rules clear. By keeping the advice we’ve discussed in mind, you can minimize the potential for errors and ensure you’re properly reporting your crypto transactions.
If you want help organizing your transactions, ZenLedger automatically aggregates your crypto transactions across wallets and exchanges, making it easier to import into the ATO’s myTax platform or provide to a registered tax agent to help prepare your tax return.
The above is for general info purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax, or other advice specific to your particular situation.