Australia Crypto Trading Tax Guide 2025

What is Crypto Trading?

Crypto trading involves buying, selling, or exchanging cryptocurrencies. The Australian Taxation Office (ATO) treats cryptocurrency as property (a CGT asset), meaning most trading activities trigger Capital Gains Tax (CGT). Common trading activities include:

• Spot trading: Buying and selling crypto on exchanges (Coinbase, Binance, CoinSpot, Swyftx)
• Crypto-to-crypto swaps: Trading BTC for ETH, ETH for SOL, etc.
• Day trading: Multiple trades within the same day
• Swing trading: Holding positions for days or weeks
• Long-term investing: Buy and hold strategies
• DeFi trading: Swaps on Uniswap, SushiSwap, PancakeSwap

ATO Treatment of Crypto Trading

The ATO treats cryptocurrency as property, and for most Australians, crypto trading results in Capital Gains Tax (CGT) consequences.

ATO Guidance on Cryptocurrency

According to the ATO:

"Cryptocurrency is a digital asset that can be used for investment purposes or to transfer or store value electronically. Transacting with cryptocurrency is subject to Capital Gains Tax (CGT)."

What are CGT Events?

A CGT event occurs when you dispose of cryptocurrency. Common CGT events include:

• CGT Event A1: Selling crypto for AUD/fiat (disposal by sale)
• CGT Event C2: Trading crypto for crypto (disposal by exchange)
• CGT Event A1: Using crypto to buy goods/services (disposal for consideration)
• CGT Event E2: Gifting crypto (disposal without capital proceeds)
• CGT Event K1: Lost or stolen crypto (disposal of crypto you can no longer access)

Non-CGT Events

• Buying crypto with AUD (no CGT until you dispose)
• Transferring crypto between your own wallets (not a disposal)
• Holding crypto (no CGT on unrealized gains)

Capital Gains Tax Rates

In Australia, capital gains are added to your assessable income and taxed at your marginal income tax rate.

Individual Income Tax Rates (2024-25)

Note: Plus Medicare Levy of 2% on taxable income

50% CGT Discount

The most important tax benefit in Australia: if you hold crypto for more than 12 months, you receive a 50% CGT discount (individuals and trusts only).

How it works:

• Hold crypto for 12 months or less = full capital gain is taxable
• Hold crypto for more than 12 months = only 50% of capital gain is taxable

Example:

• Buy 1 BTC for $50,000
• Hold for 13 months
• Sell for $80,000
• Capital gain: $30,000
• Taxable gain (with 50% discount): $15,000

Note: Companies and super funds do not receive the 50% CGT discount.

Cost Base Calculation

The cost base is the amount you paid for the cryptocurrency plus any incidental costs. The ATO allows flexibility in choosing a cost base method.

Cost Base Elements

Your cost base includes:

• First element: Purchase price (money or property given for the asset)
• Second element: Incidental costs of acquiring (trading fees, exchange fees)
• Third element: Non-capital costs of ownership (wallet fees, storage costs - rare for crypto)
• Fourth element: Capital costs of increasing value (improvements - rare for crypto)
• Fifth element: Costs of disposing (selling fees, withdrawal fees)

Cost Base Methods

The ATO allows you to choose from several methods, but you must be consistent:

1. FIFO (First-In, First-Out)

Dispose of the oldest crypto first. This is the most common method.

Example:

• Jan 2024: Buy 1 ETH for $3,000
• Jun 2024: Buy 1 ETH for $4,000
• Dec 2024: Sell 1 ETH for $4,500

FIFO: Sell the Jan ETH ($3,000 cost base) → Gain = $1,500

2. LIFO (Last-In, First-Out)

Dispose of the most recently acquired crypto first.

Same example with LIFO: Sell the Jun ETH ($4,000 cost base) → Gain = $500

3. Specific Identification

Identify the specific crypto units being disposed of at the time of disposal. Requires detailed records (wallet addresses, transaction IDs).

4. Average Cost

Calculate the average cost of all units held. Similar to Canada's ACB method.

Choosing a Method

• FIFO: Most common, simplest for long-term holders (maximizes 50% discount eligibility)
• LIFO: Can minimize short-term gains
• Specific ID: Most flexible for tax optimization (requires excellent records)
• Average cost: Good compromise between accuracy and simplicity

Important: You can use different methods for different crypto wallets/parcels, but must be consistent within each wallet.

Crypto-to-Crypto Trades

Trading one cryptocurrency for another is a CGT event (disposal of the first crypto).

Example: BTC to ETH Trade

You bought 0.5 BTC for $30,000 in January 2024. In August 2025 (19 months later), when BTC is worth $100,000, you trade 0.5 BTC for 15 ETH.

CGT calculation:

• Capital proceeds = Fair market value of 0.5 BTC = $50,000
• Cost base = $30,000
• Capital gain = $50,000 - $30,000 = $20,000
• Held > 12 months: Apply 50% CGT discount
• Taxable gain: $10,000

Your new cost base for the 15 ETH is $50,000 ($3,333.33 per ETH).

Stablecoin Trading

Trading crypto for stablecoins is also a CGT event:

• ETH → USDT = CGT disposal of ETH
• USDT → BTC = CGT disposal of USDT (usually minimal gain/loss if USDT ≈ $1 AUD)

Holding Period for 50% CGT Discount

To qualify for the 50% CGT discount, you must hold crypto for more than 12 months.

Calculating the Holding Period

• Start date: Day after acquisition
• End date: Day of disposal
• Requirement: More than 12 months (at least 12 months + 1 day)

Example: Holding Period

• Acquired: January 15, 2024
• Holding period starts: January 16, 2024
• 12 months later: January 16, 2025
• Eligible for discount: January 17, 2025 onwards

Strategic Holding

If you're approaching 12 months and have a large gain, consider waiting until after the 12-month anniversary to dispose. The 50% discount can save significant tax.

Example:

• Capital gain: $40,000
• Marginal tax rate: 37% + 2% Medicare Levy = 39%
• Without discount: $40,000 × 39% = $15,600 tax
• With 50% discount: $20,000 × 39% = $7,800 tax
• Tax savings: $7,800

Capital Losses

Capital losses can offset capital gains in the same tax year or be carried forward indefinitely.

Using Capital Losses

• Current year: Offset against current year capital gains first
• Carry forward: Unused losses carry forward indefinitely to offset future gains
• Cannot offset income: Capital losses cannot offset salary, wages, or business income
• Cannot carry back: Unlike some countries, you cannot carry losses back to previous years

Claiming Worthless Crypto

If crypto becomes worthless (exchange collapse, rug pull, token abandoned):

• CGT Event C2 may apply (cancellation, surrender, or redemption)
• Claim capital loss equal to cost base
• Document the loss (exchange bankruptcy, project abandonment, evidence token is worthless)
• Claim in the year it became worthless

How to Report Crypto Trading on Your Tax Return

myTax (ATO Online)

Most individuals use myTax through myGov:

1. Log in to myGov and access myTax
2. Navigate to Income section
3. Select Capital Gains
4. Choose CGT Schedule
5. Add each CGT event (disposal)

Information Required

For each disposal, report:

• Description: Type and amount (e.g., "1 BTC")
• Date acquired: When you purchased the crypto
• Date disposed: When you sold/traded the crypto
• Capital proceeds: Sale price or market value of crypto received
• Cost base: Purchase price + fees
• Capital gain/loss: Proceeds minus cost base
• Discount method: Check if eligible for 50% CGT discount

Paper Tax Return

If filing by paper, complete the Capital Gains Tax Schedule and attach to your tax return.

Example Trading Scenarios

Scenario 1: Short-Term Trade (No Discount)

Activity:

• March 1, 2024: Buy 5 ETH for $15,000 ($3,000 per ETH)
• November 1, 2024: Sell 5 ETH for $22,500 ($4,500 per ETH)

CGT calculation:

• Capital proceeds: $22,500
• Cost base: $15,000
• Capital gain: $7,500
• Holding period: 8 months (no discount)
• Taxable gain: $7,500

Tax owed: $7,500 × 37% = $2,775 (assuming 37% marginal rate)

Scenario 2: Long-Term Investment (50% Discount)

Activity:

• January 10, 2023: Buy 2 BTC for $80,000 ($40,000 per BTC)
• March 15, 2024: Sell 2 BTC for $140,000 ($70,000 per BTC)

CGT calculation:

• Capital proceeds: $140,000
• Cost base: $80,000
• Capital gain: $60,000
• Holding period: 14 months (eligible for 50% discount)
• Discounted gain: $60,000 × 50% = $30,000
• Taxable gain: $30,000

Tax owed: $30,000 × 37% = $11,100 (vs $22,200 without discount)

Scenario 3: Multiple Purchases (FIFO Method)

Purchases:

• Jan 2023: Buy 1 BTC for $35,000
• Jun 2023: Buy 1 BTC for $45,000
• Dec 2023: Buy 1 BTC for $55,000

Sale: Aug 2024, sell 2 BTC for $70,000 each ($140,000 total)

FIFO calculation:

• Dispose Jan BTC: $70,000 - $35,000 = $35,000 gain (held 19 months, 50% discount)
• Dispose Jun BTC: $70,000 - $45,000 = $25,000 gain (held 14 months, 50% discount)

Taxable gains:

• Jan BTC: $35,000 × 50% = $17,500
• Jun BTC: $25,000 × 50% = $12,500
• Total taxable gain: $30,000

Scenario 4: Crypto-to-Crypto with Loss

Activity:

• Feb 2024: Buy 20 ETH for $60,000 ($3,000 per ETH)
• Oct 2024: Trade 20 ETH for 1 BTC when ETH = $2,500, BTC = $50,000

CGT calculation:

• Capital proceeds: 20 ETH × $2,500 = $50,000
• Cost base: $60,000
• Capital loss: $10,000

This loss can offset other capital gains in the same year or carry forward to future years.

Scenario 5: Day Trading (Multiple Trades)

You made 150 trades during the 2023-24 financial year:

• 100 short-term trades (held < 12 months): $20,000 net gain
• 50 long-term trades (held > 12 months): $15,000 net gain

Tax calculation:

• Short-term gains: $20,000 (full amount taxable)
• Long-term gains: $15,000 × 50% = $7,500 (after discount)
• Total taxable gains: $27,500

Tax owed: $27,500 × 37% = $10,175 (assuming 37% marginal rate)

Record Keeping Requirements

The ATO requires you to keep records for 5 years after the disposal.

What to Track

• Date and time of each transaction
• Type of transaction (buy, sell, trade, swap)
• Amount of cryptocurrency
• Value in AUD at time of transaction
• Exchange or wallet used
• Purpose of transaction (investment, personal use)
• Transaction fees (add to cost base)
• Wallet addresses (for on-chain transactions)
• Other party details (if applicable)

How to Track

1. Crypto tax software: Koinly, CoinTracker, CryptoTaxCalculator (all support Australian CGT reports)
2. Spreadsheet: Track purchases, disposals, and CGT calculations manually
3. Exchange reports: Download transaction history from exchanges
4. Blockchain records: Use explorers for on-chain transactions

Common Mistakes to Avoid

1. Not reporting crypto-to-crypto trades: All crypto swaps are CGT events
2. Missing the 12-month mark: Selling at 11 months vs 13 months can double your tax
3. Forgetting to include fees in cost base: Trading fees reduce your capital gain
4. Not tracking DeFi transactions: DEX swaps, liquidity provision are CGT events
5. Inconsistent cost base method: Choose FIFO, LIFO, or specific ID and stick with it
6. Not claiming capital losses: Losses can offset gains or carry forward
7. Poor record keeping: ATO can request records dating back 5 years
8. Using foreign exchange rates incorrectly: Must convert USD/EUR prices to AUD at time of transaction

Personal Use Asset Exemption

Cryptocurrency used for personal use or consumption may be exempt from CGT if both conditions are met:

• The crypto was acquired for personal use or consumption (not investment)
• The cost was $10,000 or less

Example of Personal Use

You buy $1,000 of Bitcoin specifically to purchase a laptop for $1,000. This may qualify for the personal use exemption (no CGT on disposal).

Not Personal Use

• Buying crypto as an investment (even if later used personally)
• Holding crypto in a trading account
• Buying crypto for more than $10,000

Note: Most crypto trading does NOT qualify for this exemption because the crypto is acquired for investment purposes.

FAQs

Do I pay tax on crypto-to-crypto trades?

Yes. Every crypto-to-crypto trade is a CGT event (disposal of the first crypto). You must calculate the capital gain/loss in AUD terms.

How does the 50% CGT discount work?

If you hold crypto for more than 12 months, only 50% of your capital gain is added to your assessable income. This effectively halves your tax on that gain. Companies and super funds don't receive this discount.

Can I use FIFO or LIFO?

Yes. The ATO allows you to choose FIFO, LIFO, specific identification, or average cost. You must be consistent within each wallet or parcel of crypto.

What if I lost money trading crypto?

Capital losses can offset capital gains in the same year or carry forward indefinitely to offset future gains. They cannot offset salary or wages.

Do I need to report if I only bought crypto and didn't sell?

No. CGT only applies when you dispose of crypto (sell, trade, use). Simply buying and holding does not trigger a CGT event.

What about DeFi swaps and liquidity pools?

DeFi transactions are CGT events:

• Swaps: Uniswap, SushiSwap swaps are disposals
• Liquidity provision: Depositing crypto for LP tokens = disposal of deposited crypto
• Removing liquidity: Burning LP tokens = disposal of LP tokens

What if I used a foreign exchange like Binance?

You must still report all CGT events to the ATO, regardless of where the exchange is located. Convert USD/EUR values to AUD using the exchange rate at the time of the transaction.

Can I claim the personal use exemption for trading?

No. The personal use exemption rarely applies to trading because crypto acquired for investment purposes is not acquired for personal use or consumption.

Tools and Resources

Crypto Tax Software

• Koinly - Best for Australia, excellent CGT reports with 50% discount calculation
• CryptoTaxCalculator - Australian-founded, strong ATO compliance
• CoinTracker - Good portfolio tracking with Australian tax support
• CoinLedger - Supports Australian CGT reporting

ATO Resources

• ATO Crypto Asset Investments
• Capital Gains Tax Guide
• ATO Crypto Data Matching

Final Thoughts

Australian crypto trading taxes are relatively straightforward, with the major benefit being the 50% CGT discount after 12 months. Key principles:

• Every disposal is a CGT event (crypto → AUD, crypto → crypto)
• Hold for 12+ months to get 50% CGT discount (huge tax savings)
• Choose a cost base method (FIFO, LIFO, specific ID) and be consistent
• Capital gains are taxed at your marginal rate
• Capital losses can offset gains or carry forward indefinitely
• Report via myTax or paper tax return (Capital Gains section)

The 50% CGT discount is one of the most generous crypto tax benefits globally. A taxpayer in the 45% bracket effectively pays only 22.5% on long-term crypto gains, making buy-and-hold strategies very tax-efficient.

The ATO is increasingly sophisticated in tracking crypto transactions through data-matching programs with exchanges. Ensure you accurately report all disposals and maintain detailed records for at least 5 years.

Use Australian-focused crypto tax software like Koinly or CryptoTaxCalculator to automate CGT calculations and generate ATO-compliant reports.