Crypto Taxes in Australia: How to File, Common Forms & Tax Scenarios

Crypto Taxes in Australia: How to File, Common Forms & Tax Scenarios

Learn how Australia taxes crypto transactions and the steps you need to take to report them to the ATO.

Crypto assets have become a sizable asset class over the past decade, making them a target for many tax agencies. While many countries have struggled to keep up with the innovation, Australia has provided relatively unambiguous guidance and offers one of the easiest ways to compute, file, and pay taxes online with myTax.

In this article, you’ll learn how Australia taxes crypto transactions and the steps you need to take to report them to the ATO.

Crypto Taxes in Australia

The Australian tax year covers income between July 1 and June 30, with a filing deadline of October 31. Crypto asset trades you’ve made throughout the year are reported to the ATO by third-party providers. As a result, you need to include details in your tax return regardless of whether you’ve made a gain or loss at the end of the year.

Following a crypto asset’s disposal (sale or exchange), you incur a capital gain or loss. If you have a capital gain, you typically owe a capital gains tax based on your marginal tax rate. If you have a capital loss, you can typically carry forward the loss to offset capital gains in future years. But either way, you should report it on your tax return.

Crypto Taxes in Australia
Resident rates and thresholds for 2023-24. Source: ATO

The Australian Tax Office (ATO) provides an online calculator and record-keeping tool for capital gains taxes. You can also access the calculator and save data through ATO online services. Alternatively, a crypto-specific third-party service like ZenLedger can match transactions across platforms and compute your capital gains or losses.

How to File Your Return

The Australian Tax Office’s myTax platform is the easiest way to file taxes. On the personalize return screen, select the “You had Australian interest or other Australian income or losses through investments or property” checkbox and the subsequent “Capital gains or losses that are not from a managed fund distribution” to report crypto-related capital gains.

How to File Your Return
ZenLedger makes it easy to import transactions to compute your capital gain or loss. Source: ZenLedger

If you have used ZenLedger or a spreadsheet to compute your capital gains, you can enter it on the next screen by clicking the “Add/Edit” button next to “Capital gains or losses.” On the next screen, you can enter your total capital gains, net capital gains and losses, and whether you have an exemption, rollover, or other discount.

If you’re using the ATO’s CGT calculator, select “Other CGT assets and any other CGT events” when adding a crypto transaction. You must then enter each transaction, including a description, transaction date, cost basis, transaction fees, and capital proceeds. As a result, the process may only be feasible if you have few transactions.

Australia Crypto Tax
The ATOโ€™s CGT calculator can be time-consuming for many transactions. Source: ATO

Paper tax returns have become less common over the years, but if you’re submitting a paper return, capital gains and losses are reported on Item 18 of the Tax Return for Individuals (Supplementary Section). You may need to complete several worksheets to report your capital gains and losses, including the “Capital gain or loss worksheet.”

Common Tax Scenarios

The crypto ecosystem continues to evolve at a breakneck pace, leaving regulators to play catch-up when developing rules. That said, the Australian Tax Office (ATO) has provided relatively clear guidance on how to treat many of the most popular crypto transactions, including non-fungible tokens (NFTs) and decentralized finance (DeFi).

Staking & Airdrops

For tax purposes, any tokens you receive from staking or airdrops are considered income. The cost basis is equivalent to the value of the tokens when you receive them.

Personal Use

The ATO permits “personal use” crypto of up to $10,000, which is exempt from capital gains taxes. But generally, the longer you hold the cryptocurrency, the less likely ATO is to consider it for personal use.

Forking & Splits

The ATO doesn’t consider the value of a new cryptocurrency derived from a chain split as income. However, the new holding is treated as an investment with a cost basis of zero to calculate future capital gains tax.

Lost or Stolen Tokens

The ATO lets you claim a capital loss if you lost tokens due to theft or accident. However, you may need to provide documentation showing evidence of your ownership.

Non-fungible Tokens

Non-fungible tokens (NFTs) follow the same principles as cryptocurrencies in the ATO’s eyes. So, you owe capital gains tax on any increase in value and can claim a capital loss if you lose money.

Decentralized Finance

Decentralized finance (DeFi) is an evolving space, making creating a single set of rules harder. But generally, the tax treatment depends on whether you’re “earning” or “disposing.”

Wrapped Tokens

The ATO takes a conservative stance when looking at wrapped tokens. As a result, it’s advisable to categorize wrapping transactions as a capital gains event, although it may pay to check with a tax professional.

The Bottom Line

Crypto assets have become a trillion-dollar asset class, drawing the attention of tax authorities worldwide. While many countries have struggled to keep up, Australia’s ATO has remained ahead with clear guidance and an easy online payment process. However, it may still be worth engaging a professional if you have a complex return.

If you want to simplify your taxes, ZenLedger can help aggregate transactions across multiple exchanges, compute your capital gains or losses, and provide everything you need to upload to myTax. And if you have any problems, the platform offers a grand unified accounting spreadsheet to account for each transaction.

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This material has been prepared for informational purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax, or other advice specific to your particular situation.