Taxation of Cryptocurrency in Australia

Cryptocurrency as a Capital Gains Tax Asset

In Australia, cryptocurrency is classified as a Capital Gains Tax (CGT) asset by the Australian Taxation Office (ATO). This means that if you acquire and dispose of cryptocurrency, you will be subject to CGT implications.

Capital Gains or Losses

When you sell or dispose of cryptocurrency, you may make either a capital gain or capital loss. A capital gain is when the sale price exceeds the cost base of the asset, while a capital loss is when the sale price is less than the cost base.

If you make a capital gain on the disposal of cryptocurrency, you will be liable to pay tax on the gain. The tax rate applicable will depend on your individual circumstances.

Chain Splits

Occasionally, a cryptocurrency may undergo a chain split, which results in the creation of a new cryptocurrency. If you receive a new cryptocurrency as a result of a chain split, the ATO considers it to be a separate CGT asset.

Personal Use Assets

Cryptocurrency can also be classified as a personal use asset, which means it is not acquired for the purpose of making a profit. If you hold cryptocurrency as a personal use asset, you will not be liable for CGT when you dispose of it.

Conclusion

It is important to understand the taxation implications of cryptocurrency in Australia to ensure you comply with your tax obligations. The ATO's guidance provides clarity on the treatment of cryptocurrency, but it is advisable to seek professional advice if you have any uncertainties.