If you bought, sold, swapped or earned crypto during the 2025–26 financial year, you may have tax obligations. This guide explains what the ATO expects from you and how to report it correctly.
How the ATO views cryptocurrency
The Australian Tax Office (ATO) treats cryptocurrency as property — a Capital Gains Tax (CGT) asset, in the same category as shares and real estate. This applies to all types of crypto assets: cryptocurrencies, tokens, NFTs, and stablecoins.
Common misconception: Many people believe tax only applies when they withdraw money back into their bank account. This is not correct. Tax can be triggered by a wide range of crypto activity — not just cashing out.
The ATO runs an active data-matching program in which Australian crypto exchanges (including Digital Surge) are required to report user transaction data. The ATO may use this data to pre-fill your tax return or flag discrepancies — so accurate reporting matters.
Investor or trader: which one are you?
Before calculating your tax, you need to determine whether the ATO would consider you an investor or a trader. Most individuals fall into the investor category.
Investors generally:
Buy and sell crypto as a personal investment
Hold assets with a long-term view
Trade casually or irregularly
Are taxed under Capital Gains Tax rules
Are eligible for the 50% CGT discount on assets held over 12 months
Traders generally:
Operate on a commercial, business-like basis
Trade regularly and systematically for profit
May run a mining or exchange business
Have profits treated as ordinary income
Are not eligible for the 50% CGT discount
If you are unsure which category applies to you, seek professional advice. The ATO considers factors like frequency of trades, commercial intent, and the overall organisation of your activity.
Capital Gains Tax (CGT)
Since crypto is treated as a CGT asset, a tax event occurs whenever you dispose of it — meaning any transaction where ownership changes in some way.
What counts as a CGT event?
Selling crypto for fiat currency (AUD, USD, etc.)
Swapping one crypto for another (including stablecoins and NFTs)
Spending crypto on goods or services
Gifting crypto to someone else
Not a CGT event: Moving crypto between your own wallets (for example, from a Digital Surge wallet to your own hardware wallet) is not a CGT event, as no change of ownership occurs.
CGT rate
Your CGT rate as an individual investor is the same as your marginal income tax rate. The amount of tax you pay on a capital gain depends on your total taxable income for the financial year.
ATO Individual Income Tax Rates — 2025–26
Taxable income | Rate |
$0 – $18,200 | Nil |
$18,201 – $45,000 | 16% |
$45,001 – $135,000 | 30% |
$135,001 – $190,000 | 37% |
Over $190,000 | 45% |
The above rates do not include the 2% Medicare Levy.
Calculating your capital gain or loss
To calculate a capital gain or loss, you need your cost basis — the original purchase price plus any associated fees paid to acquire the asset.
Formula: Capital gain or loss = Value at disposal − Cost basis
If the result is positive, you made a gain. If negative, you made a loss.
Example — Capital Gain
David buys 1 ETH for $500 and sells it 14 months later for $2,000. His capital gain is $1,500. Because he held for over 12 months, the 50% CGT discount applies — his taxable gain is reduced to $750.
Example — Capital Loss
Sarah buys 1 ETH for $2,000 and sells it 4 months later for $500. Her capital loss is $1,500. She can use this loss to offset capital gains in the same year, or carry it forward to future years. Capital losses cannot be used to offset regular income like salary.
The 50% CGT discount
If you are an investor (not a trader) and held a crypto asset for more than 12 months before disposing of it, you are eligible to reduce your taxable capital gain by 50%. This is one of the most significant tax benefits available to long-term crypto holders.
Income Tax and crypto
Some crypto activity generates ordinary income rather than a capital gain, even if you are classified as an investor. When you receive income in crypto, you must report the AUD market value of the assets at the time you received them.
If you later dispose of assets you originally received as income, this triggers a CGT event. Your cost basis for that disposal will be the market value at the time you received the asset as income.
Common income examples:
Staking rewards — taxed as ordinary income at market value when received
Lending interest — taxed as ordinary income at market value when received
Getting paid in crypto — treated as employment income at the AUD value on the day of receipt
Mining rewards — taxed as ordinary income at market value when received
Airdrops: it depends on the type
Airdrop tax treatment depends on whether the token is already established (with an existing market value and trading history) or whether it is a brand-new "initial allocation" with no prior trading.
Established token airdrops: If you receive tokens that already have a market value, their AUD value at the time you receive them must be declared as ordinary income. The cost basis for any future disposal is that market value.
Initial allocation airdrops: If a new token is distributed for the first time — with no prior trading history — you generally do not derive income on receipt, and no CGT event occurs at that time. Where the tokens were received for free (with no payment made), the cost basis is $0. Where you paid something to receive the tokens, the cost basis is the amount you paid. CGT will apply when you eventually sell or trade the tokens. The 12-month CGT discount clock starts from the date you received them.
If you are unsure which category your airdrop falls into, consult a tax professional or refer to the ATO's official guidance on staking rewards and airdrops at ato.gov.au.
Example — Onchain staking rewards
Richard stakes ADA onchain and receives 50 ADA as staking rewards. At the time he receives them, ADA is worth $1.00 per token, so he must report $50 of ordinary income. If he later sells the 50 ADA for $2.00 per token ($100 total), he must calculate a capital gain of $50 — based on the $1.00 per token cost basis established when he received the rewards.
Personal use asset exemption
In narrow circumstances, a capital gain from disposing of crypto may be exempt from CGT if the asset qualifies as a personal use asset — and its acquisition cost was $10,000 or less.
Whether crypto qualifies as a personal use asset is determined by how you kept and used it at the time of disposal. The ATO's criteria are strict. Crypto is more likely to qualify when:
You acquired it with the specific intention of spending it on personal goods or services — not as an investment
You used it quickly — ideally the same day or within a very short period after purchase
You used it directly to pay for the personal item or service (converting to AUD first makes it less likely to qualify)
Once crypto qualifies as a personal use asset, whether the capital gain is exempt from CGT depends on the acquisition cost:
Acquired for $10,000 or less: Any capital gain is exempt from CGT.
Acquired for more than $10,000: The capital gain is not exempt and CGT applies in the normal way.
In either case, capital losses on personal use assets are always disregarded — they cannot be used to offset other capital gains or carried forward to future years.
The longer you hold crypto before spending it, or the more it was held as an investment, the less likely it is to qualify as a personal use asset at all.
Example: Michael wants to attend a concert. The concert provider offers tickets at a discount for crypto payments. He buys $270 worth of crypto and uses it to pay for the tickets the same day. Because the crypto was acquired and used immediately for a personal purchase, this would likely qualify as a personal use asset — and because the acquisition cost was under $10,000, any capital gain would be exempt from CGT.
Important — losses are disregarded: If you make a capital loss on a personal use asset, that loss is disregarded entirely. You cannot use it to offset other capital gains or carry it forward to future years.
The ATO has stated that most cryptocurrency is acquired for investment purposes and that this exemption applies only in rare cases. Do not rely on it for typical crypto transactions.
How to report your crypto taxes
Reporting crypto taxes can be time-consuming, especially with many transactions. Below are the two main options for lodging your 2025–26 tax return.
Option 1: Lodge yourself via myTax (through myGov)
You can calculate your capital gains and income figures yourself and lodge your return through the ATO's myTax platform. To simplify your calculations, we recommend using crypto tax software — most providers can import your Digital Surge transaction history automatically.
Digital Surge is integrated with:
Most offer a free plan to get started, but a paid plan is generally required to generate final CGT and income reports. You can import your Digital Surge transactions using API integration or a CSV export from your account settings. Always review your imported transactions carefully before generating reports.
Self-lodge deadline: 31 October 2026
Option 2: Use a registered tax accountant
If your crypto activity is complex — or you simply prefer professional assistance — a registered tax agent can calculate your crypto tax obligations and lodge your return on your behalf.
You will need to provide your accountant with your Account Statement and transaction history (CSV), both of which can be downloaded from your Digital Surge account.
Tax agent deadline: You must engage a tax agent before 31 October 2026 to be included in their lodgement program. This can extend your filing deadline to as late as 15 May 2027, depending on your circumstances.
Disclaimer: 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 or registered tax agent. The examples provided are for illustration only and may not apply to your personal circumstances. Tax laws can change — always refer to the latest ATO guidance at ato.gov.au or seek advice from a qualified tax professional before lodging your return.