Do you get taxed for transferring crypto in Australia? In short, no, transferring crypto in Australia is a tax-free event, but you need to be careful!
The Australian Tax Office (ATO) pays close attention to the crypto holdings of investors to ensure all taxable transactions are reported and paid.
However, even if some operations don’t have to be reported to the ATO, there are still compliance obligations you need to follow. Let’s cover everything you need to know about transferring crypto in Australia and reporting your Australian crypto taxes.
KEY TAKEAWAYS about Transferring Crypto in Australia
- As a general rule, transferring cryptocurrencies between personal wallets is not a taxable event in Australia, according to the ATO;
- However, fees paid to transfer crypto assets between wallets will be considered a disposal, triggering capital gains taxes for the amount of crypto spent;
- Transferring crypto from an address you own to an address that belongs to someone else will be considered a gift, triggering a taxable event;
- The easiest way to track your crypto transfers and taxable transactions (including fees) is by using a crypto tax calculator like CoinTracking that does it automatically.
Is Transferring Crypto a Taxable Event in Australia?
You won’t have to pay a crypto transfer tax since Australia does not tax crypto transfers if both the addresses (the one sending crypto and the one receiving crypto) belong to you.
However, don’t forget that if you paid any fees, i.e. transfer, or network fees in crypto for that transfer, you’ll trigger a capital gains tax event. Please check the example on how to calculate those gains in the next section.
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Are Crypto Transfer Fees Tax-Deductible in Australia?
In some countries, transfer fees may be deductible, but in Australia that is not the case.
Transfer or network fees paid in crypto in a transfer are seen as a disposal by the ATO, and you’ll have to calculate the gain/loss from the amount of crypto spent.
Here’s an example:
- You bought 1 ETH for AUD 3K on Date X
- On Date Y, you transferred ETH and paid 0.01 ETH as a fee.
- On Date Y, 1 ETH was worth 4K
- The sales proceeds (the value of 0.01 ETH on Date Y) is AUD 40 (4K*0.01 ETH)
- The market value of those 0.01 ETH on Date X (cost basis) was AUD 30 (0.01*3K)
- The capital gain from spending this fee to transfer crypto is AUD 10 (AUD 40 - AUD 30)
Are Wallet-to-Wallet Transfers Taxable?
Wallet-to-wallet transfers are not taxable events in Australia, assuming that you own both of those wallets. If that’s the case, the transfer is not taxable.
If the wallet you’re sending crypto to does not belong to you, the transaction will trigger crypto trading taxes (capital gains tax) as it is seen as a disposal, in this case, a crypto gift to someone else.
How to Record Crypto Transfers for the ATO
The easiest way to record crypto transfers and all other information about your crypto activity is to use a crypto portfolio tracker and tax calculator like CoinTracking.
Why? Because all your tracking is done automatically. CoinTracking stores the key information, lets you calculate your crypto taxes directly, and generates a tax report.
Here are examples of the type of crypto information you need to keep track of, according to the ATO:
- Cost basis of the crypto that you acquired
- Sales proceeds of any sold crypto
- Fair Market Value (in AUD) of any crypto income at the time it was received
- Dates of every crypto trade
- Types of assets, their purpose, and wallet addresses involved
Carefully track your crypto activity throughout the year to enjoy a smoother tax season.
How to Reduce Crypto Taxes in Australia
The best way to reduce your crypto taxes in Australia is to hold your purchased crypto for over 12 months before selling it, so you can enjoy a 50% discount on your taxable profit. If you follow this legal way to lower your capital gains taxes, you can save 50% of your crypto capital gains taxes.
You can also choose to realize your capital gains in years where you might have a lower base income, to be taxed at a lower income tax bracket and save on your crypto taxes in Australia.
In Australia, you can also offset capital gains with crypto losses and even carry those losses forward for future years.
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Conclusion about Transferring Crypto in Australia
Transferring crypto between personal wallets in Australia is crypto tax-free, but you have to account for details like any fees spent to transfer those assets. Transfer fees, paid in crypto, are treated as a disposal, triggering capital gains taxes.
Moreover, if you send crypto to a wallet that isn’t yours, it will be considered a gift, and treated as a capital gains taxable event in Australia.
On top of the tax intricacies in Australia, you need to keep detailed information about your crypto activity, besides calculating your crypto taxes, from income to capital gains, in each tax season.
The easiest way to keep track of your crypto portfolio and stay compliant is with a crypto tax calculator like CoinTracking, enabling you to generate an Australian tax report.
Disclaimer
The information provided in this article is for educational and informational purposes only. It is not intended as financial, investment, tax, or legal advice. Cryptocurrency investments are highly volatile and carry significant risks. Before investing in cryptocurrencies, conduct thorough research, consult with a financial advisor, and ensure you understand the risks involved. The author and publisher are not responsible for any financial losses or damages that may occur from following the information presented in this article. Always use caution and make informed decisions when dealing with cryptocurrencies.
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