Finder makes money from featured partners, but editorial opinions are our own.
Crypto Tax Calculator Presents: The 2023 Crypto Tax Hub
Having the right tools in place will help you manage your crypto tax obligations more effectively.
This guide is brought to you by Crypto Tax Calculator and Finder. On this page, you'll find a selection of articles and resources that provide you with information about your tax obligations around cryptocurrency. Before October 31 2023, ou can also get an exclusive discount of 30% off your first tax report from Crypto Tax Calculator by using the code FINDER23. To learn more about Crypto Tax Calculator, make sure to visit its website.
Preparing your crypto for tax time 2023
When it comes to tax time, having all of your assets in order is essential. Crypto is no exception.
The legislation around cryptocurrency taxation in Australia is relatively new and still evolving. So it's important to make sure that you're aware of your obligations, to avoid running afoul of the ATO.
What are crypto assets?
"Crypto assets" is a broad, catch-all term designed to refer to a range of different cryptocurrencies, NFTs and other similar emerging technologies stored on blockchains.
To the general public, crypto tends to be most heavily associated with Bitcoin. But since Bitcoin debuted in 2009, the crypto world has expanded to include thousands, if not tens of thousands, of different types of crypto assets.
But although they have different forms and can carry out different functions, every crypto asset has these 3 things in common:
It's digital
It's stored on the blockchain
It has real-world value – though as with any type of asset, what they're worth can vary quite a bit
Tax considerations for crypto assets
One thing that's tripped up many crypto investors over the years is assuming that tax doesn't need to be paid on crypto earnings.
But this isn't true.
Crypto is considered an investment. As per Australian legislation, tax needs to be paid on money earned via investments.
We'll break down how that plays out down below, but in short, you can find yourself in hot water if you're not reporting crypto assets.
Monitoring transactions
When it comes to crypto, it's not just the buying and selling that's important. It's what you do with your crypto while you're holding it that can also have tax implications.
But why?
Well, like any other asset class on the market, crypto is generally bought and sold with the idea of making a profit.
With that said, crypto tends to be pretty dynamic. It's rare that people purchase it and just sit on it for years, the way you might with a physical asset like gold.
Rather, one type of crypto is often traded for other types of crypto (e.g. Bitcoin for Ethereum). Rewards may be earned by staking,airdropping or other types of transaction.
Some analogies can be drawn with share dividends or interest paid on bonds. But because crypto is a relatively new asset, it's not always immediately clear to investors which transactions attract tax and which don't.
Not to mention the paperwork involved in maintaining records across multiple exchanges, multiple different types of crypto assets and accounting for all the fluctuations in value.
With the right calculator software, you'll be able to track your transactions, determine whether they're likely to be taxable and create an accountant-ready report.
This allows you to ensure accuracy when you're lodging your return.
Capital gains tax vs income tax
By and large, tax on crypto focuses on capital gains. This is because the Australian government doesn't recognise crypto as a currency in and of itself, it's just an asset like any other.
So in practice, you bought low, you sold high and in turn you pay tax on the difference.
Unless, of course, you made a loss. We'll get to that shortly.
Income tax can still come into play, though. Money earned through transactions like staking or airdropping can arguably be considered as earnings that should be lodged for income tax.
However, legislation is still very much emerging around crypto assets and tax.
At time of writing, there are numerous grey areas, so it's always worth consulting with a financial professional for up-to-date advice.
Traders vs investors
If you're a crypto trader (i.e. someone buying and selling crypto on a professional basis), then your tax implications will be a bit different to a private investor.
As with many other asset classes, the distinction between a trader and investor can be a bit hazy.
However, if the ATO suspects that you are a trader, or you're just buying and selling sufficiently large amounts of crypto, you may be required to register for an ABN.
By and large, though, most crypto owners in Australia are considered investors.
They might own some crypto, but it's often not the central focus of their portfolio. Alternatively, they might own quite a bit of crypto, but they're not trading and transacting at a commercial scale.
As with any other type of investment, it's possible to make a loss on crypto.
Whether you're a trader or investor, you're able to claim losses to offset your current or future capital gains.
However, this only applies when you've actually divested yourself of the asset. It doesn't account for the fluctuations that can occur during your lifetime of holding the asset.
If you've held a crypto asset for 12 months or more, you're usually also able to apply for a discount on any capital gains tax that you may have incurred.
If you're a professional trader, you can also generally claim some of the costs of crypto purchases back too.
International crypto assets
If you currently hold crypto assets in overseas-based exchanges, it's possible that you will be required to pay tax both in Australia and in the exchange's home country.
Make sure you consult with a professional to see if you have any overseas tax obligations prior to lodging your Australian return.
Helpful articles and guides to assist you with your crypto tax needs
In addition to the information above, we've compiled a range of resources and articles to help you get prepared this tax season, explaining the hows, whys and what you need to know.
James Edwards was the cryptocurrency editor at Finder. He led the editorial strategy and reported on the latest industry news to further Finder's mission of helping people make better financial decisions.
A relatively early adopter, James has been using Bitcoin since 2013 and began working in the industry in 2017. He takes pride in his ability to boil down complex topics into language his parents can understand.
His expertise has seen him called on to report at events such as TechCrunch Disrupt, CoinDesk Consensus and IBM Think, and he has coordinated a vast number of high-profile interviews with the industry's brightest minds.
He is a regular contributor to Nasdaq and is frequently called upon for market commentary in Australia and abroad. See full profile
A comprehensive review of CoinTracking, the portfolio manager that aims to make it easy to track all your digital currency trades and simplify tax time for crypto buyers.
Read our comprehensive guide to comparing and choosing cryptocurrency tax accountants and tax agents in Australia.
Feedback
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
This guide is brought to you by Crypto Tax Calculator and Finder. On this page, you'll find a selection of articles and resources that provide you with information about your tax obligations around cryptocurrency. Before October 31 2023, ou can also get an exclusive discount of 30% off your first tax report from Crypto Tax Calculator by using the code FINDER23. To learn more about Crypto Tax Calculator, make sure to visit its website.
