The Australian Taxation Office (ATO) is one of the strictest regulators when it comes to crypto. Since 2014, it’s been clear: crypto is property, not money, and almost every transaction is taxable.
Whether you’re HODLing long-term, staking on-chain, or degen-ing into DeFi, here’s how crypto tax works in Australia in 2025 👇
🔎 How the ATO Classifies Crypto
- Crypto is treated as a CGT asset.
- Any disposal is a taxable event, including:
- 💵 Selling for AUD or other fiat
- 🔄 Swapping one crypto for another
- 🛒 Using crypto to buy goods/services
- 🎁 Gifting crypto (except to spouse/domestic partner in some cases)
💰 Capital Gains Tax (CGT)
- You pay CGT when you dispose of crypto at a profit.
- Discount: If you hold crypto >12 months, you may get a 50% CGT discount.
- Tax rate depends on your personal income tax bracket (0–45%).
Example:
- Buy 2 ETH for AUD $5,000.
- Sell for AUD $12,000 after 18 months.
- Profit = AUD $7,000.
- With 50% discount, only AUD $3,500 is taxable → added to your income.
👉 Frequent traders may be treated as running a business (see below).
🧾 Income Tax on Crypto
Some crypto earnings are taxed as ordinary income:
- Staking rewards → income at market value when received.
- Airdrops → usually income when received.
- Mining → income (if commercial scale, ATO may classify you as running a business).
- DeFi/yield farming → often income when rewards are received.
- Later disposal of those tokens → triggers CGT again.
👨💼 Trader vs Investor
- Investor: Occasional activity, profits = capital gains.
- Trader/business: Frequent, organised activity → profits taxed as business income (no CGT discount).
- Classification depends on factors like turnover, intention, and record-keeping.
🎨 NFTs & DeFi
- NFTs – treated as CGT assets; creating/selling NFTs regularly may count as business income.
- DeFi – lending, staking, liquidity pools → income when earned, CGT when disposed.
📉 Losses
- Capital losses can offset capital gains.
- If losses exceed gains, they can be carried forward indefinitely.
- Business losses may be deductible against other income (subject to non-commercial loss rules).
🕵️ ATO Enforcement in 2025
- The ATO has data-matching agreements with major exchanges (both domestic & global).
- They track wallet addresses, fiat on/off-ramps, and transaction histories.
- Non-disclosure can lead to penalties:
- ⏰ Late lodgment → fines
- 🚨 Evasion → penalties up to 75% of tax avoided
🛠️ Compliance Checklist
- Keep detailed records – dates, AUD value, counterparties, wallet addresses.
- Track holding periods – 12+ months = 50% CGT discount.
- Separate personal vs business activity.
- File accurately – include all crypto activity on your annual tax return.
✅ Key Takeaways (Australia)
- Crypto = CGT asset. Almost every disposal is taxable.
- Hold >12 months → 50% discount on capital gains.
- Staking, mining, airdrops, DeFi → taxable as income when received.
- Traders may be taxed as businesses (no CGT discount).
- The ATO is one of the most aggressive tax authorities on crypto worldwide 🌏.