Cryptocurrency Tax in Australia: What Every Investor Needs to Know in 2025–26
Key Takeaways
- The ATO treats cryptocurrency as a CGT asset, not currency — selling, swapping, spending or gifting crypto is a taxable event.
- Holding a crypto asset for more than 12 months generally qualifies individuals for the 50% CGT discount.
- Crypto earned from mining, staking or as payment is taxed as ordinary income at its AUD value when received.
- The ATO receives data directly from Australian exchanges, so undeclared gains are highly likely to be detected.
Here’s something that surprises a lot of Australians: the ATO already knows about your crypto.
Through its data-matching program, the ATO collects transaction records from Australian and international exchanges — covering up to 1.2 million individuals every year. If you’ve been trading, staking, or swapping crypto and haven’t declared it, the ATO may already have the data to flag your return.
With the end of the 2025–26 financial year approaching, now is the time to get your crypto tax sorted. This guide covers everything you need to know.
How the ATO Classifies Cryptocurrency
First things first: the ATO does not treat cryptocurrency as money or foreign currency. Instead, it classifies crypto assets — including Bitcoin, Ethereum, stablecoins, and NFTs — as property for tax purposes.
This means most crypto transactions are subject to Capital Gains Tax (CGT), not income tax. The key exception is when you’re earning crypto (through staking, mining, or as payment for services), in which case it’s treated as ordinary income.
There’s also an important distinction between investors and traders:
- Investors hold crypto for capital growth. Their profits are subject to CGT rules, including the 50% discount for assets held over 12 months.
- Traders buy and sell crypto in a business-like, high-volume manner. Their profits are treated as ordinary business income — no CGT discount applies, but business expenses can be deducted.
Most Australians who buy and hold crypto fall into the investor category.
Which Crypto Transactions Trigger a Tax Event?
This is where many people get caught out. A taxable event doesn’t just happen when you sell crypto for Australian dollars. The ATO defines “disposal” broadly, and the following all trigger a CGT event:
- Selling crypto for AUD — the most obvious one
- Swapping one crypto for another (e.g., Bitcoin for Ethereum) — yes, this is taxable
- Using crypto to buy goods or services — spending crypto is a disposal
- Gifting crypto to another person (except to a registered charity)
- DeFi interactions — adding tokens to a liquidity pool, wrapping tokens (e.g., ETH to WETH), or removing liquidity
On the income side, the following are treated as ordinary assessable income at the time you receive them:
- Staking rewards
- Airdrops (in most cases)
- Mining income (if conducted as a business)
- DeFi yield farming and lending interest
- Crypto received as salary or payment for services
The ATO has recently confirmed that wrapping and unwrapping tokens triggers a CGT event — a detail that catches many DeFi users off guard.
How to Calculate Your Capital Gain or Loss
The formula is straightforward:
Capital Proceeds − Cost Base = Capital Gain or Loss
- Capital Proceeds = the AUD value of what you received when you disposed of the asset
- Cost Base = what you paid for it, including exchange fees and network (gas) fees
The 50% CGT Discount
If you held the crypto asset for more than 12 months before disposing of it, you’re eligible for the 50% CGT discount. This means only half of your capital gain is added to your taxable income.
Example:
- You buy 1 ETH for $2,000
- 15 months later, you sell it for $5,000
- Capital gain: $3,000
- After 50% discount: $1,500 is added to your taxable income
This discount is not available to companies or to traders. Note that swapping or wrapping a token resets the 12-month clock for the new asset.
Capital Losses
If you sell crypto at a loss, that capital loss can be used to offset capital gains in the same year. If your losses exceed your gains, the net loss carries forward to future years — but it cannot be used to reduce ordinary income like your salary.
Be aware: the ATO is actively monitoring wash sales — selling crypto to crystallise a loss and immediately buying it back. If the dominant purpose is to generate a tax benefit, the ATO may disallow the loss.
2025–26 Tax Rates for Crypto Gains
Net capital gains and crypto income are added to your total assessable income and taxed at your marginal rate:
| Taxable Income | Tax Rate |
|---|---|
| $0 – $18,200 | 0% |
| $18,201 – $45,000 | 16% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001+ | 45% |
The Stage 3 tax cuts (effective 1 July 2024) continue to apply in 2025–26, which may reduce the effective tax on crypto gains for many investors compared to prior years.
The ATO’s Data-Matching Program: They Already Know
The ATO’s crypto data-matching program is active through the 2025–26 financial year. Under this program, the ATO collects the following from exchanges:
- Your name, address, date of birth, and contact details
- Linked bank account details
- Wallet addresses
- Transaction dates, coin types, quantities, and AUD values
The ATO estimates it captures records for up to 1.2 million individuals annually. This data is cross-referenced with lodged tax returns to identify unreported gains.
Looking ahead, Australia has committed to the OECD’s Crypto-Asset Reporting Framework (CARF), which from 2026 will enable automatic data sharing between international tax authorities. If you hold crypto on overseas exchanges, the ATO will increasingly have visibility over those holdings too.
Record-Keeping: What You Must Keep
Record-keeping is a legal requirement, not optional. You must retain records for at least five years after lodging your tax return. For each transaction, you need:
- Date of the transaction
- AUD value of the crypto at the time
- Nature of the transaction (sale, swap, purchase, etc.)
- Details of the other party (e.g., wallet address)
- Exchange confirmations and statements
- All associated costs (fees, gas costs)
If you have a high volume of transactions, dedicated crypto tax software (such as Koinly, CoinTracker, or Syla) can automate much of this process by connecting directly to your exchanges and wallets.
A Note on the Bitcoin Court Ruling
In May 2025, an Australian court classified Bitcoin as “Australian money.” However, this ruling is currently under appeal and does not override the ATO’s official guidance. For the 2025–26 tax year, you must continue to treat crypto as a CGT asset. The ATO has not changed its position, and taxpayers who rely on the court ruling to avoid declaring gains do so at their own risk.
What’s Coming: Proposed CGT Changes from 2027
The Federal Government has proposed replacing the 50% CGT discount with an inflation-based calculation from 1 July 2027. This doesn’t affect your 2025–26 return, but long-term crypto investors should keep an eye on this development — it could significantly change the tax treatment of assets held for many years.
Sources
- ATO: Crypto asset investments
- ATO: Keeping crypto records
- ATO: Crypto assets data-matching program protocol
- Koinly: Crypto Tax Australia Expert Guide 2026
- National Accounts: Crypto Taxation Complete 2026 Guide
Get Expert Help With Your Crypto Tax
Crypto tax can be complex — especially if you’ve been staking, using DeFi protocols, or trading across multiple exchanges. Getting it wrong can mean penalties, interest charges, or an ATO audit.
TaxServe Australia specialises in helping individuals and businesses navigate Australian tax law, including cryptocurrency. Whether you need help calculating your gains, reviewing your records, or lodging your 2025–26 tax return, our team is here to help.
Contact TaxServe Australia today for a consultation and make sure your crypto tax is handled correctly this EOFY.
Frequently Asked Questions
Do I have to pay tax on cryptocurrency in Australia?
Yes. The ATO treats cryptocurrency as a CGT asset, not currency. You make a capital gain or loss whenever you sell, swap one crypto for another, spend it, or gift it. Crypto received as income (mining, staking, or payment) is taxed as ordinary income at its AUD value when received.
How is a capital gain on crypto calculated?
Your capital gain is the AUD value at disposal minus the AUD cost base (what you paid plus fees). If you hold the asset for more than 12 months, individuals generally qualify for a 50% CGT discount.
Does the ATO know about my crypto?
Yes. The ATO receives data directly from Australian cryptocurrency exchanges under its data-matching program and cross-checks it against lodged returns, so undeclared crypto gains are highly likely to be detected.