Crypto is taxed in Australia as it is considered a form of property that is subject to both capital gains and income tax.
In Australia, it is important to know whether you are a trader or an investor, as that will determine how you are taxed on your cryptocurrency. Investors pay capital gains when they dispose of their crypto, while traders pay income tax. According to the ATO (Australian Taxation Office), investor and trader are distinguished as follows:
Investor: Investor usually buy crypto and hold it long-term to build wealth over time, and this includes most retail investors.
Trader: This would include those mining or trading cryptocurrency in an "organized, business-like manner". Traders may have a significant capital investment, a focus on short-term profits, and/or a large volume of daily or weekly trades. Traders are not eligible for the 50% long-term capital gains discount, however any relevant costs can be deducted as expenses.
Capital Gains Tax in Australia
Capital gains tax occurs when you dispose of your crypto. Examples of transactions that would incur a capital gains or loss in Australia include:
Selling crypto.
Trading one crypto for another crypto.
Using crypto to make a purchase.
In Australia, capital losses can be used to offset capital gains.
Capital Gains Tax Rate Australia
In Australia, the amount of tax you'll pay on your cryptocurrency income is dependent on your income levels during the current year. If a taxpayer holds their crypto for more than 12 months, they can apply a 50% long-term capital gains discount. Below is a breakdown of tax by income level.
Australian residents tax rates 2023–24
Taxable income | Tax on this income |
0 – $18,200 | Nil |
$18,201 – $45,000 | 19c for each $1 over $18,200 |
$45,001 – $120,000 | $5,092 plus 32.5c for each $1 over $45,000 |
$120,001 – $180,000 | $29,467 plus 37c for each $1 over $120,000 |
$180,001 and over | $51,667 plus 45c for each $1 over $180,000 |
Income Tax in Australia
Income tax will apply in Australia for crypto that you have earned. The income is based on the value of the crypto at the time it was received. Example of crypto that would be subject to Income Tax in Australia include:
Earned crypto (for example as payment from a job).
Staking rewards.
Mining income.
Interest or dividend income.
Tax-Free Crypto Transactions in Canada
The following are examples of tax-free transactions in Australia.
Buy crypto with fiat.
Holding crypto.
Transferring crypto between wallets or exchanges accounts you own.
Receiving crypto as a gift.