Australia Crypto Tax Guide

The ATO has quite detailed guidance on the tax implications of crypto, but it’s not always easy to understand if you’re not a tax expert. That’s why we’ve teamed up with crypto tax calculator Koinly to break down the basics of crypto taxation in Australia, including how crypto is taxed and how you can easily file with Nexo and Koinly. 

Important: Koinly does not offer tax advice. This article is not intended as financial advice or a personalized recommendation. Always consult a tax professional for guidance specific to your situation.

How is crypto taxed, and what constitutes a taxable event?

In Australia, crypto is classed as a property and an asset for tax purposes. This means when you dispose of crypto, you’ll have a gain or loss. Disposals of crypto include:

• Selling crypto for AUD

• Trading crypto for crypto

• Spending crypto on goods or services (unless it’s a personal use asset)

• Gifting crypto to friends or family

Australia doesn’t have a specific Capital Gains Tax rate, instead, the tax you’ll pay is based on your Income Tax rate and how long you’ve held the asset for. Short-term gains from assets held less than a year are taxed at your usual Income Tax rate, while long-term gains from assets held more than a year receive a 50% discount (provided you’re an individual investor and not a trader). Traders cannot access this discount. You can learn more about what constitutes a trader vs. an investor on the ATO site.

Losses from disposals of crypto can be offset against your gains to reduce your overall tax liability. If you have no gains to offset, you can carry losses forward to offset against future gains.

There are other instances where your transactions will be classed as income and subject to Income Tax upon receipt. These include:

• Getting paid in crypto

• Staking rewards

• Mining rewards (if not classed as a hobby miner)

• Airdrops of crypto - excluding initial allocation airdrops

• Referral rewards

• Selling NFTs you create

How much tax will you pay?

The Income Tax rate in Australia for 2024-2025 is:

Remember, long-term gains from crypto receive a 50% discount.

How to calculate your crypto taxes

To calculate your capital gain or loss from a given transaction, use the following formula:

Capital Gain/Loss = Selling Price - Purchase Price

If you otherwise disposed of your crypto (for example by trading, spending, or gifting it), then the selling price refers to the fair market value of your cryptocurrency at the time you disposed of it in AUD.

For additional income from crypto, you’ll need to calculate the fair market value of your crypto at the point you received it in AUD.

Accounting method for crypto

Although the formula above is correct, the reality is most investors are trading across multiple platforms with multiple assets of the same kind, and tracking cost basis in this instance can become confusing. 

An accounting method is used in these instances to dictate the order in which you utilise your cost basis, or, in other words, the order in which you disposed of your crypto. For Australian investors, the ATO says the following cost basis methods are allowable:

• FIFO (First In, First Out): The asset you acquired first is the asset you dispose of first.

• HIFO (Highest In, First Out): The highest priced asset is the asset you dispose of first.

• LIFO (Last In, First Out): The last asset you acquired is the first asset you dispose of.

For traders, only FIFO is permissible.

Are different digital assets taxed differently?

From a tax perspective, the ATO treats crypto assets the same, regardless of the specific type of token.

How are airdrops and forks taxed?

The ATO has very specific guidance on the tax implications of airdrops, generally treating them as ordinary income at the fair market value on the date you receive them. To calculate your tax, work out the token's market value on receipt and apply your Income Tax rate.

However, initial allocation airdrops are exempt from this rule. They’re not considered income at receipt, making them tax-free. Your cost basis is what you paid (or zero if you paid nothing).

How to report your crypto taxes

In Australia, the financial year runs from July 1 to June 30 the following year. You’ll report your crypto as part of your annual tax return by October 31 or May 15 if you’re filing using an accountant. You can do this via the myTax portal or using paper forms NAT 2541 and NAT 2679. If you’ve earned more than $10,000, you’ll also need to file a Capital Gains Tax Schedule.

How to calculate your crypto taxes using Nexo & Koinly

Easily calculate your crypto taxes with Nexo’s Koinly integration. Just import your Nexo transaction history into Koinly, and it will automatically work out your capital gains, losses, and income. Here’s how to do it step-by-step:

1. Set up a free Koinly account. Create a free Koinly account to get started.

2. Connect to Nexo via SSO or upload a CSV

• Auto-sync: Use SSO to authorize read-only API access to Nexo. Koinly will then sync your transaction history automatically.

• Manual import: Download a CSV of your Nexo transactions from the Transactions tab in Nexo. Make sure to select the full date range and include all transaction types. Then upload the file to Koinly under "import from file."

3. Let Koinly calculate your taxes Once imported, Koinly will calculate your capital gains, losses, and income automatically.

4. Download your tax report Review your tax summary, confirm accuracy, and download the report when ready. Koinly generates dedicated reports for Australian investors, including the myTax report to make it easy to file with the ATO.  You’ll need a paid plan to access the full report.

Final tips

• Keep records of all transactions, including timestamps, values, and fees.

• Consult a tax professional if you engage in complex trading or DeFi activities.

• Use Koinly to automate calculations and ensure compliance.

📌 Start calculating your crypto taxes with Koinly today! [Insert Link]

* According to Koinly’s tax guides and general blog posts

The information in this article is for general information only.  It is not intended to serve as an inducement to use Nexo's services or those of Koinly. It should not be taken as consulting professional advice from either Nexo or Koinly. Neither Nexo nor Koinly is a financial adviser. You should consider seeking independent legal, financial, taxation, or other advice to check how the website information relates to your unique circumstances.