Taxation for Cryptocurrency in Australia

Cryptocurrency tax in Australia has come a long way since 2017’s market-wide rally. Nowadays, the Australian Tax Office (ATO) has a substantial amount of tax guidance on cryptocurrency buying and selling.

For the most part, the basic tax principles that apply to your other assets holdings, such as shares, apply to your cryptocurrency holdings. Put another way: You’re still required to record gains and losses when you sell cryptocurrency.

If you are trading or investing a significant amount of cryptocurrency, strongly consider speaking with an accountant.

Australia’s Cryptocurrency Tax Treatment

Simply put, if you make a profit when you sell a cryptocurrency you acquire, you must pay tax on the gain.

And if you make a loss, you must record this as well. (The most common way that people acquire cryptocurrencies is by buying them. Other ways to acquire cryptocurrencies include via airdrops.)

What Is Cryptocurrency for Tax Purposes in Australia?

As far as the ATO’s tax treatment of cryptocurrencies is concerned, the term cryptocurrency not only describes BTC but also other cryptocurrencies that share similar characteristics with BTC.

Whilst you may argue that a cryptocurrency you hold is fundamentally different to BTC, the ATO will still likely deem that you are holding a taxable asset. You are likely holding an asset that you must pay tax on if sold for a profit—that is, the income you have generated from holding the asset.

This is the exact same tax treatment that applies when you sell shares on a stock exchange.