In Australia, cryptocurrency and crypto assets such as Bitcoin, Ethereum, and non-fungible tokens (NFTs) are treated as property for tax purposes. This means they are subject to Capital Gains Tax (CGT) when sold or exchanged, and the tax treatment depends on how they are used, acquired, and disposed of.

The most common use of crypto assets is as an investment, where individuals buy and hold crypto with the intention of making a profit when selling or trading. If you make a profit (capital gain) on the sale of a crypto asset, it will be subject to CGT.

However, if you are using crypto for personal transactions (rather than investment), it may not be subject to CGT if certain conditions are met.

Businesses that use crypto, however, must account for it as trading stock or ordinary income, meaning the proceeds and expenses are treated as part of regular business income, not capital gains.

Accurate record-keeping is crucial to comply with Australian Taxation Office (ATO) requirements. You must track all your crypto transactions, including purchases, sales, and exchanges, to correctly calculate any gains or losses.

For more guidance on how cryptocurrency affects your taxes, or if you need assistance managing your crypto tax obligations, contact Sixth Sense Tax. We are here to help you navigate the complexities of crypto taxation in Australia.