Crypto Taxes in Australia: Complete Guide (2024)

Ah, Australia.

The country where beer does flow and crypto regulation has a long way to go.

While holding and trading crypto is entirely legal in Australia, figuring out how crypto taxes work in the land down under is no small task.

Especially since recent changes to the country’s crypto tax policy have only made things more complicated.

While we’re at it, you’ll also probably want to know about the unlikely way that Australians can get a 50% break on their crypto taxes.

That’s why we’ve put together this plain-English overview of crypto taxes in Australia in 2024.

Key Takeaways

• Crypto is completely legal to hold and trade in Australia.
• Crypto, when used for investment purposes, is taxed as capital gain and considered as income.
• Most crypto activities are taxable in Australia.
• Australia’s crypto tax framework is controversial, especially due to recent changes.
• Australia’s tax framework offers ways to reduce the amount of tax you owe by as much as 50%.

Is Crypto Taxed in Australia?

Many basic crypto activities are taxed in Australia, so if you’re trading crypto there are a few things you might want to be aware of.

For the most part, Australia’s crypto tax rules fall under the umbrella of the country’s existing financial regulation.

As of press time in 2024, the main type of tax that you might incur while trading crypto is capital gains tax (CGT).

That’s because, per the Australian Taxation Office, using crypto as an investment means that you’ll have to pay CGT.

Unfortunately, calculating the amount of capital gains tax that you owe on your trades is not as simple as we’ve seen in countries like Poland and Estonia, since there is no flat rate.

In Australia, your capital gains from crypto are considered as part of your personal income. They’re then taxed based on your marginal tax rate.

To help address this complexity, the country’s tax authority has released a free calculator that you can use to determine the amount of CGT you owe.

What Crypto Activities Are Taxable in Australia?

While not all crypto activities are taxable in Australia, many are.

In fact, changes to Australia’s crypto tax rules have only increased the number of situations in which you might owe capital gains tax.

As of press time, these are the key crypto activities defined in Australia as taxable events:

• Selling your crypto for fiat currencies, such as the Australian dollar.
• Gifting crypto.
• Buying goods or services with crypto.
• Trading one cryptocurrency for another.

When, and how much, you owe will also depend on whether or not you are considered an investor or a trader for tax purposes. 

This is a subtle yet crucial distinction that you’ll need to work out when determining your tax obligations.

It’s also important to note that the Australian government instructs individuals and businesses to keep a record of all of their crypto transactions.

Why Australia’s Recent Crypto Tax Changes Are Controversial

In Australia, trading from one cryptocurrency to another is currently considered to be a taxable event.

It’s referred to as a crypto to crypto exchange or swap, and it could make you liable to pay CGT.

This is a stark departure from the approach taken by many other countries, where you only owe taxes when you realize your profits—usually by selling them for fiat currencies. 

It’s part of a broader set of controversial changes to how crypto taxes are calculated in the country.

These changes have been criticized as further complicating Australia’s crypto tax rules, while also leaving Australia behind countries that have taken a more generous stance.

Still, as recently as last year, the Department of the Treasury said it was working on forward-thinking crypto regulation designed to “address consumer harms” while promoting innovation.

But for right now, Australia seems to be taking the title of one of its most popular songs a little too literally, because it Feels Like We Only Go Backwards.

How to Lower Your Crypto Taxes in Australia

For all of Australia’s crypto tax headaches, there are a few opportunities for reprieve.

After all, is there any better aspirin than a big tax break?

The first way to lower crypto taxes in Australia is to report your capital losses. 

Since crypto losses can be claimed on taxes in Australia, they can reduce the amount of capital gains that you are considered to have earned. 

This, in turn, can lower the amount of tax that you owe.

In addition, since the money you earn from crypto is usually taxed as part of your income, you shouldn't owe tax if your salary and investments add up to less than the country’s tax-free threshold.

In other words, if all of your sources of income in a given tax year add up to less than $18,200 AUD, your crypto capital gains will likely not be taxable. 

Finally, another major way to lower your crypto taxes in Australia is to hold the same asset for more than 12 months before engaging in a taxable event.

This is known as the CGT discount, and it is available to individuals, not businesses, who are legal Australian residents.

While these types of tax reduction opportunities may make Australia an attractive trading ground for some, many of the country’s current rules in regards to taxable events are nothing shy of puzzling and rigid.

Overall, Australia’s current crypto tax laws seem out of line with the country’s own regulatory bodies, which have professed an intent to build a forward-thinking landscape. 

Only time will tell whether or not the country’s current approach will be seen as growing pains in a larger journey towards an accessible tax framework. 

But if not, it’s hard to imagine Australia will keep Stayin' Alive–yes, this song is considered Australian too–in conversations about the world’s crypto-friendly countries.

Frequently Asked Questions (FAQ)

Is cryptocurrency legal in Australia?

Most standard crypto activities are entirely legal in Australia.

For tax purposes, the government instructs that you keep a record of all of your crypto transactions.

Do you pay tax on crypto in Australia?

Crypto is taxable in Australia, primarily in the form of capital gains tax.

How much is capital gains tax in Australia?

In Australia, capital gains tax isn’t a flat rate. Rather, it’s based on tax brackets.

For individuals, this is usually paid based on the individual’s marginal tax rate as part of a standard income tax return.

Can you claim crypto losses on taxes in Australia?

In Australia, capital losses can offset the amount that you owe in taxes in some circumstances.

This means that it is often worth claiming your crypto losses when doing your tax return, as these losses can reduce your capital gains.

How do I cash out crypto in Australia?

Cryptocurrencies can be readily cashed out in Australia using a range of easily accessible exchanges and financial services. 

Importantly, the process of cashing out will likely constitute a taxable event, meaning you might have to pay capital gains tax.

Is Australia crypto friendly?

Whether or not any country is ‘crypto friendly’ is a matter of perspective. 

On the one hand, crypto is legal and accessible in Australia, and regulators have claimed to be interested in promoting innovation.

At the same time, however, the country’s current tax rules can be seen as both prohibitive and confusing for everyday crypto holders.

DISCLAIMER

The content of this blog post is intended for informational purposes only. It does not constitute financial or tax advice. Readers are encouraged to consult with qualified experts for personalized guidance on cryptocurrency taxation and financial matters.