How to Pay Tax on Cryptocurrency in Australia


5/21/20232 min read

A close up of a gold bit coin
A close up of a gold bit coin

Australian Tax Laws Regarding Cryptocurrency

Cryptocurrency has become increasingly popular in recent years, and with that popularity has come a growing interest in how cryptocurrency is taxed in Australia. The Australian Taxation Office (ATO) considers cryptocurrency to be an asset, and as such, it is subject to capital gains tax (CGT). This means that you will need to pay tax on any profits you make from selling or trading cryptocurrency.

There are a few things to keep in mind when it comes to paying tax on cryptocurrency in Australia. First, you will need to keep accurate records of all your cryptocurrency transactions. This includes the date of the transaction, the amount of cryptocurrency involved, and the price of cryptocurrency at the time of the transaction. You can use a cryptocurrency tax calculator to help you track your profits and losses.

Second, you will need to report your cryptocurrency profits on your tax return. You can do this by including them in your income under "Other income". If you have made a capital gain, you will need to calculate the capital gain using the following formula: Capital gain = proceeds from sale - cost base

The proceeds from sale is the amount of money you received when you sold your cryptocurrency. The cost base is the amount of money you spent to acquire your cryptocurrency.

Once you have calculated your capital gain, you will need to apply the CGT discount. The CGT discount is a reduction in the amount of tax you owe on capital gains. The amount of the discount depends on how long you held your cryptocurrency. If you held your cryptocurrency for more than 12 months, you will be eligible for a 50% discount.

If you have any questions about how to pay tax on cryptocurrency in Australia, you should contact the ATO.

Here are some additional things to keep in mind when it comes to cryptocurrency tax in Australia:

You will not be taxed on cryptocurrency if you simply hold it as an investment. You will only be taxed if you sell or trade cryptocurrency and make a profit.

If you receive cryptocurrency as payment for goods or services, you will need to declare it as income.

If you use cryptocurrency to purchase goods or services, you may be able to claim a deduction for the cost of the goods or services.

If you lose cryptocurrency, you may be able to claim a loss on your tax return.

The ATO is constantly updating its guidance on cryptocurrency tax. It is important to stay up-to-date on the latest changes so that you can ensure that you are paying the correct amount of tax.