Tax season is here. If you made any cryptocurrency trades, investments or transactions during the financial year, you may need to report them on your tax return.

This guide explains how the Australian Tax Office (ATO) views cryptocurrency, how Capital Gains Tax and Income Tax apply to crypto, and the ways you can report your crypto activity.

A common misconception is that tax only applies when you withdraw money from crypto back into your bank account. This is not correct.

The ATO treats cryptocurrency as property and therefore as a Capital Gains Tax (CGT) asset. This applies to cryptocurrencies, tokens, NFTs and stablecoins. Many crypto transactions can trigger a CGT event, and some types of crypto activity may also be taxed as income. We explore both below.

Before calculating your tax obligations, you need to understand whether you are considered an investor or a trader, as the tax rules differ.

Most individuals in Australia fall under the investor category.

Investors generally:

Traders generally:

Investors are eligible for the 50 percent CGT discount on assets held longer than twelve months. Traders are not eligible for this discount because their profits are taxed as income.

As crypto is treated as a CGT asset, it is taxed similarly to shares and other investments.

A CGT event occurs when you dispose of cryptocurrency, meaning ownership changes in some way.

Common transactions that trigger a CGT event include:

Your CGT rate as an individual investor is the same as your standard income tax rate. How much tax you pay depends on your total taxable income for the financial year.

Image source: ATO

To calculate your capital gain or loss, you need to know your cost basis. This includes the purchase price plus any associated fees.

Capital gain or loss formula:
Value at disposal minus cost basis

If the disposal value is higher than your cost basis, you made a capital gain and tax may apply. If the disposal value is lower, you made a capital loss that can be used to offset other capital gains.

David buys 1 ETH for $500 and sells it six months later for $2000.

If David held the ETH for more than twelve months, he would be eligible for the 50 percent CGT discount, reducing the taxable gain to $750.

Sarah buys 1 ETH for $2000 and sells it six months later for $500.

Sarah can use this loss to offset capital gains in the same financial year or carry it forward to future years. Capital losses cannot be deducted from regular income.

You may be eligible for a CGT exemption if you acquired less than $10,000 worth of crypto purely for personal use and held it only briefly before spending it.

The longer you hold the crypto, the less likely it will be classed as a personal use asset. This exemption does not apply if the asset was held for investment purposes.

Steve buys $300 worth of BTC and spends it the same day on computer accessories. Because the crypto was used immediately for personal purchases, the transaction would likely be exempt from CGT.

Some crypto transactions are considered income, even if you are an investor. These often involve receiving new assets.

Common examples include:

The fair market value of the assets at the time you receive them must be reported as income.

If you later dispose of assets you received as income, this triggers a CGT event. The cost basis will be the market value of the asset at the time you received it.

Richard earns 50 ADA through Digital Surge’s Earn program. At the time he receives it, ADA is worth $1, so he must report $50 of income. If he later sells the 50 ADA, he must calculate a capital gain or loss based on the $1 cost basis.

Reporting crypto taxes can be time consuming, especially if you have many transactions. Below are the two most common ways to complete your tax return.

You can calculate your own CGT and income figures and lodge your tax return using MyTax. You will need to link the ATO to your MyGov account.

To simplify your calculations, we recommend using crypto tax software. Digital Surge is currently integrated with:

Most providers offer a free plan to help you get started, though you will need a paid plan to generate full CGT and income reports.

You can import your Digital Surge transactions to these platforms using either an API integration or a CSV export. Once your transactions are imported, review them carefully before generating your final reports. After that, you can enter the figures into your tax return.

If you are lodging your tax return yourself, the deadline is 31 October 2025.

If completing your own crypto tax return feels too complex, you may prefer to work with an accountant. They can calculate your crypto obligations and lodge your return for you.

Your accountant will need your Account Statement and transaction history as a CSV file. Both of which can be downloaded from your Digital Surge account.

If you plan to use an accountant, you must engage them before 31 October 2025. Registered tax agents may then offer extended lodgement deadlines, potentially up to May 2026 depending on your circumstances.
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The information in this article is general in nature and does not constitute financial, tax or legal advice. Digital Surge is not a financial adviser. The examples provided are for illustration only and may not apply to your circumstances. You should consider seeking professional advice to understand how this information relates to your personal situation.