This is the ultimate Crypto Tax Guide for Australia 2024 with everything you need to know.

All of this information has been verified by certified tax experts. However, we do strongly encourage you to talk to a tax accountant yourself when filing your taxes this year.

There will be a series of examples to make everything as simple as possible. That’s also why numbers in calculations have been purposely kept low even though they are not realistic anymore at all.

There will be a series of examples to make everything as simple as possible. That’s also why numbers in calculations have been purposely kept low even though they are not realistic anymore at all.

The Australian Tax Office (ATO) has specific guidelines for crypto showing how seriously they are taking it and how seriously you should take it. While some people might still think that their wallets are hidden, every exchange is working together with the ATO and is probably already aware of what you’re doing.

In short, every disposal of crypto is subjected to tax. Disposing can mean different things such as trading crypto for crypto, selling crypto for fiat, spending crypto, or gifting  crypto. You can find a more detailed list of all the taxable actions here.

Moreover, every time you dispose of your crypto it’s incredibly important to keep the following records to be prepared to file your taxes.

The date of transaction, receipts, and proof of transaction, the exchanges and wallet records, the prices in AUD, the reason for the transaction, and if applicable also the agent, accountant, and legal costs you had.

Knowing that crypto exchanges are sharing their data with the ATO, it’s even more important to be truthful in your tax statements from the beginning. As the ATO puts it: It’s no hide-and-seek situation.

Failing to be honest in statements and lodging your reports on time can lead to serious consequences such as hefty fines or prison sentences. While the latter is less common, it’s an unnecessary risk that could cost you a lot.

That’s why we collected everything important so you can be perfectly prepared.

It’s important to understand how crypto is looked at by Australia and everything that needs to be considered by someone who makes transactions with crypto.

In Australia, crypto is classified as a CGT asset, similar to shares, property, and collectibles. If this is the case, it will be taxed as a capital gain.

Crypto can also lead to sources of Ordinary Income, similar to how you earn income from interest or dividends. Therefore, this will be subject to income tax.

Before getting into all the details, it is important to understand that there are two different ways the ATO can look at people using crypto. Depending on how you are seen, this will have an impact on what kind of tax you have to pay and how much.

An investor is someone who purchases crypto with the expectation of long-term growth in the value of the asset, they are not trading crypto for short-term profit. In short, it is seen as an asset similar to property or shares and is taxed as Capital Gain Tax.

This leads to the advantage of having the possibility of reducing the CGT by 50% when holding crypto for at least 12 months and 1 day before selling.

Additionally, there are four different methods of calculating your net capital gain: FIFO, HIFO, LIFO, and LTFO. These methods will be explained further.

Contrary to a crypto investor, a crypto trader is someone who actively trades crypto with the expectation of making short-term profits. A crypto trader is in the business of trading crypto and their crypto is treated as trading stock. This means that there is likely to be a business plan and the sophistication of record-keeping is higher. Therefore, profits from a trading activity are treated as Ordinary Income.

One major disadvantage of this definition is that a trader is not able to claim the 50% CGT discount even if coins are kept for longer than 12 months and 1 day. It only limits the net capital gain calculation method to FIFO, instead of having other alternatives.

However, there are some advantages as fees and equipment are considered to be expenses for the business and are deductible. Additionally, unrealized losses can effectively be used to lower the value of assets without having to sell them. Net losses can be used to decrease the income and therefore, reduce the amount of tax paid.

Differences between investor and trader for crypto tax purposes

The majority of this article is based on crypto tax on an investor basis, assuming that businesses tend to have their professional tax accountant.

While the above table indicates how the ATO might classify you, this can sometimes be tricky. The ATO provides more information on how they define investors and traders.

If this still doesn’t clear things up, it’s advisable to get in touch with a professional tax accountant.

The investor has the option to claim the 50% CGT discount for investments longer than 12 months and 1 day, which has the potential to reduce your tax payment by half. However, if you don’t keep your assets for more than one year, this advantage is not valid.

Additionally, there are a few options to choose from regarding the tax calculation method from FIFO, HIFO, LIFO, and LTFO. The fees for trading crypto are included at the time of the trade happening on a cost basis, which is explained in more depth here.

As a trader, it’s impossible to get a 50% discount on long-term investments and FIFO is the only allowed method to calculate your tax.

However, there are other advantages. Because it’s seen as a business the expenses of keeping it up such as fees and equipment can be deducted. Moreover, if the asset's value goes down it can be used to lower the value without the need to sell it, so to speak an unrealized loss.

Net losses can be used to decrease your income and therefore, potentially putting you in a lower tax category.

Investor and trader guidelines’ comparison

To summarise, both types of crypto users have their advantages and disadvantages. However, it’s not possible to select which one you’d like to be, yet it depends on your activity and the goal behind your trades.

If, for any reason you want to become a trader after you started in crypto as an investor, this is certainly possible. Syla explains what you have to consider when changing from investor to trader.

As previously mentioned above, crypto can either be taxed as Capital Gain or as income and we’re going to look at this more in depth now.

Before we dive into how to calculate capital gains made from crypto investments, it’s worthwhile to understand how capital gains are looked at.

In Australia, your income from employment plus the income from capital gain builds your accessible income, which defines your tax rate.

Australian Tax Rate Calculation

Depending on how much your accessible income is, you’ll fall into one of the below five tax rate tiers.

Australian Income Tax Brackets 2023-24

In more detail, the ATO published the below individual income tax ratesfor 2023-2024. There is a tax threshold of $18,200.

After having decided what tax rate you have to pay, you need to find out how exactly to calculate the net capital gain.

There are two basic calculations when it comes to crypto tax. First, the cost basis identifies how much the coins we own cost. Second, the capital gain (or potential loss) to figure out how much we made by selling crypto.

The Cost Basis calculation is pretty straightforward: it’s the coin cost and the fees we had to pay to purchase it.

Crypto Cost Basis Calculation

Example,

Tim buys 1 BTC on August 1st, 2023 for $2,000 with fees of $50. Therefore, his cost basis is $2,050.

The capital gain is the result of the value at disposal minus the cost basis. So how much you sell the coin for minus how much it cost you to acquire it beforehand?

Three months later, he decided to sell 1 BTC for $400 with fees of $5. To calculate his capital gain, we have to take into account how much he sold it for and the cost basis of the purchase and sale.

Crypto Cost Basis Calculation

Example

Three months after buying the Bitcoin for $2,000 and fees of $50. Tim decided to sell 1 BTC for $4,000 and paid fees of $50 to do so.

His capital gain is $4,000 minus the cost basis from above, $2,050, and the new fees, $50. This leads to $1,900. 

This gain then has to be included in the tax report and tax will be paid on this amount

One option to reduce the capital gain tax is to buy and hold on to your crypto assets. If we sell crypto 12 months and 1 day after we purchase it, the capital gain tax goes down by 50%.

HODL 50% Capital Gain Tax Discount Explained

Example

Instead of selling 1 BTC in November 2023, Tim holds on to it until August 2nd 2024, and sells it for $5,000 with a fee of $50.

This means his new capital gain is $5,000 - $2’050 plus the new fee of $50, equal to $2,900.

However, because he held on to this investment for more than one year, he can claim the 50% discount on this gain and only has to pay tax on $1,450.

However, sometimes the situation isn’t this positive and we might sell coins at a loss, meaning the calculation of value at disposal minus the cost basis leads to a negative number.

Crypto Capital Loss Calculation

Example

Instead of selling the 1 BTC for $4,000, Tim sells it for $1,000 and pays fees of $50. His cost basis is still $2,050.

However, now we have $1,000 for selling the BTC - $2,050 cost basis plus the fee of $50, leading to a loss of $1,100.

This loss can then be either used to offset gains during the current year or carried forward to the next year.

So far, the examples to calculate the cost basis were quite simple because we always assumed to sell the same coin as we bought.

However, what happens if we have several coins and how do we decide which one is sold?

This is where the different methods come into play. There are four main methods that you can choose from as an investor: FIFO, LIFO, HIFO, and LTFO.

If you’re classified as a trader, FIFO is the only option for you.

FIFO is the default method and as the name says it: the first in, is sold first and the price and fees are based on the first purchased BTC.

Another option is the Last In, First Out method, where the coin that was purchased last is going to be the basis for the cost basis calculation.

The third option is called Highest In, First Out where it doesn’t matter when the coins were purchased but more for how much they were purchased for.

It’s not always obvious which method will lead to the best tax outcomes, and let’s face it, most of the time we just want whichever option means less tax. Syla is a crypto tax calculator that applies LTFO matching to minimize tax paid. LTFO effectively searches through the full history of purchases and chooses the one that leads to the lowest tax outcome, and less tax paid.

Considering that the coins’ blockchain incorporates every detail of every purchase, it’s fairly easy to exactly determine which coin is being sold at what point. This leads to the specific ID method where the coin that is being sold is identified including its value when it was bought.

Therefore, it’s easy to calculate the net capital gain for exactly this coin. A practical example for this method is Non-Fungible Tokens (NFT) which can be specifically identified by their unique ID.

Everything is always easier with examples and that’s why we summarized all of these methods in this table.

Including the years and numbers also makes it clear that the different methods can have a huge impact on the net capital gain as the results go from profits ranging from $2,900 to $900. Moreover, some of them even get a 50% discount as they’ve been held on for longer than 1 year and 1 day.

All of these five methods are allowed as long as you are trading as an investor, however, it’s best to stick with one method in each financial year.

When you’re trading as a business and are considered a trader, you can only apply the FIFO method.

Given that you’re an investor, it’s possible to change the method you’re using from one year to another. Moreover, it’s allowed to change the method from coin to coin, however, this is a lot of work and increases the risk of mistakes drastically.

That’s one reason why using crypto tax software that allows for the parcel matching strategy (LTFO) can be incredibly beneficial.

After having understood how crypto is classified and which methods there are to calculate your taxes, it’s time to look into what else you have to think about.

Remembering from above, you have to keep records for every crypto transaction. In more detail, you have to make sure you note when, what, where, for how much, why, and whether you got some support.

Just before lodging your taxes, you have to find out how much your net capital gain and income from crypto transactions is. This can be a bit time-consuming, especially thinking about all the different methods of cost basis calculations.

That’s why Virgo is working on making this super easy for you. With one click you will get a statement containing your complete transaction history, which can be easily used to calculate your capital gains and income.

Once you have this file, you can either add these numbers to your taxes yourself or consult with a trusted crypto tax accountant.

In crypto, there are a lot of different actions and to make it even more complicated, they are all taxed differently.

We’re going to end this chapter with a comprehensive Australian Crypto Tax Treatment Table.

In crypto, there are a lot of different actions and to make it even more complicated, they are all taxed differently.

Transfer crypto

Once you’ve bought crypto, there are several things you can do, you can either hold on to it, transfer it, or sell it.

Holding crypto

One thing you can do once you own crypto, is to just keep it. 

Once you’ve decided to dispose of your crypto, you can do this in exchange for other crypto or fiat money. They’re both taxed as Capital Gain Tax.

Payments of any sort can happen in many ways, including crypto, and even within crypto there are several ways: transfer to your wallet or airdrops.

Sometimes changes to a blockchain network are necessary due to safety reasons or to allow for updates to the software. These chain splits are called a fork, and there are two different types.

A soft fork is considered to be backward-compatible meaning that there are only small changes and the newly issued software protocol is seen as valid by the old system. Moreover, just some users have to upgrade their software to make sure they can access the new network.

A hard fork is not backward-compatible because the old system does not accept the new one. Therefore, there is a hard chain split leading to two separate blockchains, one that follows the old protocol and one that follows the new one.

The two different forks can either leave you with the slightly different but equivalent coins in your wallet (soft fork) or end up with new coins in your wallet in a hard fork. Naturally, this also leads to a different way of it being taxed.

The chain splits are taxed differently when you receive them or sell them.

Of course, sometimes you can be generous and give crypto to somebody as a gift or donate crypto to a charity that accepts them.

Mining is the creation of new blockchains and so to speak how crypto coins are created.

They can either be done as a hobby or more serious as a business and they are differently taxed.

In order to create new blockchains and therefore, new coins, the transactions on it have to be validated. This can either be done via proof of work (PoW) where it’s a competition to solve a mathematical problem.

Or it can be done via proof of stake (PoS) where the validators of transactions are randomly selected. However, these validators require some crypto assets, stake, in order to showcase how reliable they are.

Staking is the process of providing your crypto assets to a certain validator in order for them to validate new transactions. In other words, you agree not to sell your crypto for a certain amount of time as it’s used by a validator to create new blockchains.

This of course gets you a reward, think about giving a bank money and receiving interests from them as a reward of them having access to your money and being able to invest it in other things.

Staking is often done by “HODLers” that keep their crypto assets for a long time and yet still want to make some money with it without necessarily having to trade it.

While this sounds like an amazing idea, it’s not without its risks as the reliability of validators varies. If your chosen validator makes a mistake and validates a wrong transaction, you could lose all of the promised crypto assets.

Non-Fungible Tokens can either be digital or physical items such as art, real estate or music. It means that it’s unique and irreplaceable. Something is so specific about it that it can never be replicated with something else.

In order to make it non-fungible a creator has to tokenize the item, meaning adding it to the blockchain including who ownership. Once it’s on the blockchain, it’s tradeable and this is where tax comes into play.

For tax purposes, it’s treated just as any kind of a crypto asset. One major difference is that because a NFT is by definition not to be confused with any other NFT, there is only one tax calculation method available: the specific identification one.

The table below summarises crypto transactions and how they are taxed in Australia.

The following transactions are subjected to Capital Gain Tax indicating that every gain or loss made has to be reported.

In order to calculate the gain you simply take your cost basis and the value of the disposal to calculate your gain.

However, there are different methods of calculating the cost basis depending on whether you’re an investor or trader.

Some crypto transactions are considered to be just like income and therefore, are subjected to income tax.

If you have any of these transactions, simply include them to your income in your tax report.

Some crypto transactions are tax-free and don’t have to be included in your tax filings.

However, while the receipt of crypto might be tax-free, as soon as you dispose of them, your profit might be subjected to capital gain taxes.

Therefore, it’s important to keep honest records of the fair market value of any crypto gifts on the day that you receive them. This will help you in your calculations for your cost basis.

For an investor, crypto donations to a deductible gift recipient are tax deductible.

Some transactions might even be tax deductible such as when you sell your crypto at a loss, losing your crypto due to it being stolen or hacked and when you donate do a deductible gift recipient.

When you’re a classified as an investor and lose access to your crypto, whether it’s stolen or hacked, you can claim this as a capital loss.

Just having a look at the table above, it’s clear that crypto tax can be very complicated, time-consuming, and confusing. Therefore, it’s important to get professional help from somebody who knows what they’re doing. Making a mistake in your taxes, even if you didn’t want to can have serious consequences so it’s worth getting help.

Keep in mind that the expenses for this year’s tax accountant can be deducted next year.

Taxes can be quite complicated and crypto being quite new, can make it even harder.  That’s why crypto tax calculators and software are incredibly popular to make it as easy as possible.

There are a lot of options for crypto tax software out there and we had a look at all of them, giving you a list of the most popular ones.

Syla is an Australian-based crypto tax software that makes it simple to accurately complete your crypto taxes. Designed by Australian tax professionals, and having received support from the Australian Government, you’ll have peace of mind that everything is reported accurately to the ATO requirements.

Syla also has its unique Lowest-Tax First-Out (LTFO) tax optimisation. This ensures you can safely achieve the lowest tax outcomes possible.

It’s incredibly easy to get started, you just have to download your transaction file from Virgo and drop it into Syla. The tax calculations are automatically done for you.

Besides providing you with a crypto tax report that has everything needed for your tax return,  you can also use Syla to keep track of your portfolio and monitor your tax position throughout the year.

Syla has affordable plans to suit all Australian crypto investors, starting from just $59 per year on the Budget plan.

Remember, costs related to preparing your tax can be claimed as a tax deduction on your tax return. So you’re making life easy, knowing everything is lodged correctly to the ATO guidelines, and you get to claim the cost as a tax deduction.

There are a few strategies and things to keep in mind in order to keep your taxes as low as possible.

All of the strategies mentioned in the table can have an impact on how much taxes you will need to pay. So it makes sense to keep them in mind in order to take full advantage of them.

It’s important to calculate your capital gain, however, it’s also important to remember that the first $18,200 of your income tax is tax-free.

One of the most important methods to lower your CGT is the HODL strategy for investors. Keeping your crypto assets for more than 12 months and 1 day cuts your CGT by 50%.

When using crypto for buying personal assets they might be tax free. However, this rule is quite tricky and timelines have to be considered carefully. If you want to apply this strategy, it’s best to make sure with a professional that it’s within the ATO’s guidelines.

There’s a lot to consider when you’re lodging your taxes including crypto transactions and that’s why it’s no surprise that mistakes happen.

One of the most common pitfalls is that people aren’t aware that the ATO already knows about your crypto wallets and think they don’t have to include their crypto earnings in their tax files.

Moreover, it’s not advisable to not lodge your tax files in general because you think it might go away or because you won’t be able to pay your taxes. It’s always better to be proactive and get in touch with the ATO before receiving a reminder and risking penalties.

Another one is not being aware of the legal tax optimization strategies such as the 50% discount of the Capital Gain Tax for long-term investments, missing to include fees in the cost basis calculation, and not following the lowest tax, first out calculation method for net gains.

Having several wallets or being active on different exchanges increases the complexity of lodging your taxes. While it’s possible to still do your taxes with the tax reports you can download from every exchange, it’s a lot of effort and time and you might not be sure that you’re following all of the ATO’s guidelines.

That’s why working with professional tax accounting software can make your life easier and give you confidence that everything is filed correctly.

While the ATO does its best to stay up to date and provide guidelines for every potential transaction, there are still some areas that aren’t exactly clear.

This is the case for the two different types of airdrops, the one with known value tokens and the one with unknown value tokens, the initial allocation airdrop. While one is taxed immediately as income, the initial allocation airdrop is not as there is no official value at the time of receipt.

Another source of uncertainty is the receiving of staking rewards, as some rewards aren’t immediately accessible and so it’s unclear when and to what value they should be counted as income.

These uncertainties can quickly be cleared up by the ATO and it’s important to stay up to date with new rules. As this can be quite time-consuming, this is why official tax accounting software can be helpful.

Keep accurate records of your transactions throughout the year.

Lodging your tax files on time and in an honest way. Keep the important dates in your calendar and set reminders in order to give yourself enough time to prepare everything.

Invest in professional tax accounting software, such as Syla, in order to save yourself time and make sure everything is accurate. The cost for an accountant can be deducted from next year's tax lodging.

While the End of the Financial Year is always accompanied by sales and special promotions, it’s also the time to lodge your taxes. This can become a stressful time for some and that’s why we’re here to help you. So you can fully focus on the good sides of the EOFY.

Crypto has been around for a few years now and the Australian Government has caught up with all of its guidelines and rules. The ATO is working closely with every Australian Cryptocurrency Designated Service Provider (DSP) with a data matching program.

That means if you have an account with any exchange platform they most likely have your information and know the know-your-customer (KYC) information from your verification process.

Some people have even received warning letters from the ATO during the last few years, highlighting again that crypto is taxable and that these people have to amend their lodgement within 28 days.

The ATO is taking crypto tax seriously and that’s why you should, too.

Virgo is working on a report to make taxes as easy as possible by providing you with one single CSV document with every information you need.

Filing taxes can always be nerve-wracking, that’s why it’s important to be prepared and know when what needs to happen.

We have summarized all the important dates below with the most important date being the deadline for filing your taxes. If you’re doing it by yourself, it’s due October 31st, 2024 and if you’re doing it with the help of an accountant, it’s May 15th, 2024.

While Australians might be known to be a bit loose with deadlines, this is definitely not the case when dealing with the ATO and taxes.

There are serious consequences for failing to lodge your tax completely, doing it too late or falsifying statements made in it. It’s also important to remember that crypto trading platforms are working together with the ATO and therefore, they know about your wallets and there’s no point in trying to hide your crypto assets.

The Ultimate Guide to Crypto Tax 2024 in Australia is long and covers everything you need to know. That’s why we mention all the most important information again.

The ATO is taking crypto tax seriously. It is aware of your crypto wallets and there’s no point in trying to hide your transactions as this will only lead to problems.

It’s crucial for filing your crypto tax to have a good system of record keeping that includes the currency, date, amount, reason and potential help. This will make it simple once it’s time to lodge your taxes.

The ATO differentiates between people who use crypto for personal reasons on a small scale and calls them investors. People who use crypto as a business are called traders and are taxed differently.

In short, every disposal of crypto is taxed in some manner. The tax can be Crypto can be capital gain tax, and income tax but sometimes might also be tax free or even tax deductible.

In order to calculate your capital gain, you start by calculating your cost basis which is what you paid for your coin plus the fees. Once you have this established, you subtract the cost basis from the value at your disposal.

However, there are different tax calculation methods that choose different values for your cost basis. The methods are called FIFO, LIFO, HIFO, Spec ID and LTFO. All of them are available for investors, whereas only FIFO is available for traders.

Some of the most common legal strategies to optimize your tax are selling your coins after 12 months and 1 day in order to profit from the 50% discount of the capital gain tax, this strategy is called HODL. Additionally, the tax calculation method can also lead to a big difference in defining your net profits. It’s important to include all kinds of fees in your cost basis in order to keep your taxes as low as possible. And in case you’re selling your crypto for a loss, you can deduct that amount from your taxes in the current year or carry it forward to the next one.

The most important date to keep in mind is October 31st 2024 if you’re lodging your taxes independently or May 15th 2025 if you’re doing it with a tax accountant.

Talking to a crypto tax professional makes a lot of sense considering that there are a lot of things to consider, you might not be aware of optimization strategies and mistakes can get you in a lot of trouble. There’s a variety of tax accounting or crypto tax software available that make sure that everything is done correctly.