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Millionaire Mindset for Women in Business

How are cryptocurrency transactions taxed in Australia?

Dec 2, 2021

Cryptocurrency Taxation in Australia

Crypto Crackdown

Whether you’re currently involved in a cryptocurrency like bitcoin, or considering buying a cryptocurrency, it’s vital to explore the tax implications. While these will vary according to your circumstances, and it’s important to seek professional advice, there are some basic tenets you can start with.

Getting started

No matter how you intend to use your cryptocurrency, you must keep accurate records of your buying and selling.

Your records must include:

  • transaction date
  • the value of the cryptocurrency in Australian dollars
  • what the transaction was for and who the other party was, including their cryptocurrency address.

Tax responsibilities

In Australia, cryptocurrency transactions are subject to both income and capital gains taxes. While your digital wallet can contain different types of cryptocurrencies, each one is counted as a separate asset for Capital Gains Tax (CGT).

A Capital Gains Tax event occurs when you ‘dispose’ of your cryptocurrency. Disposal may mean that you:

  • sell or gift cryptocurrency
  • trade or exchange cryptocurrency
  • convert cryptocurrency to fiat currency
  • purchase goods or services with cryptocurrency.

If you have transacted with a foreign cryptocurrency exchange you may have tax responsibilities in another country.

Personal asset use

Personal use assets are not generally subject to tax on transactions. Your cryptocurrency use may be regarded as a personal asset if it is kept or used to purchase personal items. This means that capital gains/losses that arise may be disregarded. For example, buying cryptocurrency specifically to purchase an item that can be paid for using cryptocurrency could be considered personal asset use.

It’s important to know that this does not apply if you are buying cryptocurrency as an investment, as part of a profit-making scheme or as part of a business.

Keeping up to date

Cryptocurrency is a rapidly evolving area. It’s important to stay up to date and understand any developments in tax consequences. The ATO has a guide, including examples and links for additional information to help you.

Get in touch. We can explain the ATO’s rules and regulations for your investments and provide guidance for your situation.

Author

  • Suzanne Walker


    Suzanne Walker is the founder of one of Australia’s leading public accounting firms, Clear Path Accounting, and has built her results-based reputation as a transformational business advisor over the last 25 years. She holds the philosophy that accounting is more than just tax returns and compliance and believes that accountants can have a profound impact on the lives of their clients.

    Suzanne began her career after completing her degree in Commerce from the University of South Australia. She started out working for a large accounting firm in Sydney before deciding to make the bold move of starting her own practice. Since then, she has helped countless business owners achieve their financial goals through her sound advice and guidance.

    Establishing a career as a young mum of three, in a male-dominated industry has also gifted her with a passion for helping other women in business. Motivating her to co-create courses and business mastermind groups specifically to empower women with the skills they need to find their own version of success.

    In addition to her work at Clear Path Accounting, Suzanne is also the Vice President of the Penrith Valley Chamber. She regularly attends and often hosts meetings, events and seminars, in an effort to support others in her local business community.

    Suzanne is passionate about helping her clients achieve financial success, taking a personalised approach to every engagement. Her dedication to her clients and her commitment to excellence have made her a trusted advisor to many businesses in Australia.

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