Crypto and the Australian Tax Office (ATO) – What You Need to Know in 2025

How the ATO Taxes Crypto Transactions

Crypto is considered property in Australia and taxed accordingly, with income and capital gains taxes at play. 

Crypto investors can face capital gains taxes when they dispose of crypto in transactions like:

• Selling crypto for FIAT (e.g., AUD).
• Selling crypto for another crypto.
• Selling an NFT for crypto.
• Selling a DeFi token for an NFT.
• Spending crypto to purchase a product /service (excluding personal use asset).
• Gifting crypto to someone other than your spouse.

In these cases, investors need to calculate the gain/loss on each trade. If they held crypto for over 12 months before selling it, only 50% of the gain in that trade will count towards the investor's taxable income.

Whereas crypto income from transactions like staking, mining, airdrops, crypto interest, or hard forks is calculated by determining the Fair Market Value (in AUD) of that income when the investor received it.

After accounting for all the gains and income, crypto investors will be taxed according to the tax rate of the income bracket they fall under. Here are the income tax rates for 2025 in Australia:

What the ATO Expects From Crypto Users

The ATO expects crypto users to not only follow regulations and report their crypto trading taxes and crypto income taxes, but to keep very detailed information about their crypto activity, including:

• Keep proof of when you buy, transfer, or sell any crypto.
• Collect the dates of every transaction.
• Keep wallet addresses of transactions (yours and who you traded with).
• Save all statements from exchanges.
• Determine the Fair Market Value (in AUD) of crypto income activities.
• Keep receipts for any agent, accountant, or legal fees.
• Track any costs from using crypto tax software.

You should keep records of crypto transactions for at least 5 years, according to the ATO recommendations counting from the date when:

• You had transactions
• You had tax records
• A capital gains taxable event happened

The ATO also provides tips to make your crypto tax compliance easier throughout tax seasons, including:

• Regularly track/export your transaction history from the exchanges you use.
• Set a reminder to frequently track/export information.
• Work with a native crypto tax calculator (e.g., CoinTracking) that enables you to import transactions and generate a tax report for Australia.
• Use tools and resources to get any potential lost record of your crypto activity.
• Don’t close an account on an exchange without downloading your info first.
• Use a blockchain explorer or contact the crypto exchange's customer service if you need to recreate lost records.

How the Australian Tax Office Tracks Crypto Transactions

The Australian Tax Office has been working and improving its advanced data-matching program, in collaboration with the established digital asset service providers (DASPs) in the country. The ATO has access to many advanced forensic tools, from blockchain analytics to explorers, to find crypto transactions from taxpayers. 

Tax authorities like the ATO also have the legal ability to inquire licensed platforms (e.g., crypto brokers, exchanges) to share customer information (e.g., crypto portfolios) around undisclosed or not disclosed crypto. 

Given this legal ability, many investors have received letters from tax authorities across countries with amounts of tax due, penalties/fees, etc.

How to Report Taxes in Australia?

In Australia, investors have to calculate their total income and capital gains each tax season to determine which tax income bracket they fall under and the respective tax rate on their income. 

Investors have to file their tax return for individuals in Australia and its supplementary section if they do it via paper form, or they can do all of this via the government’s online service, myTax.

How ATO Crypto Rules Could Evolve

The ATO, as other tax authorities, can adopt a different view towards crypto, with rules evolving to match internal agreements and standards. Let’s look at what could change.

1. Changes in Crypto Tax Rates

One of the easiest ways Australian crypto regulations could change is tax rates going up as it is a simple-to-execute measure from governments worldwide when it comes to crypto.

2. Stricter Regulations

The ATO can become more aggressive in the list of regulations that govern crypto in the country, becoming more difficult for new players to establish operations or for crypto businesses to flourish. 

3. Reporting Requirements

The ATO could introduce new requirements beyond the tax returns that crypto investors have to currently submit, which would make reporting more cumbersome for individuals. 

4. New Taxes

A new way crypto could change in Australia is through the introduction of new tax types (e.g., wealth taxes, inheritance, unrealized gains taxes), or a shift in how crypto is taxed overall, such as implementing a dedicated crypto capital gains tax instead of relying solely on income tax rates.