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2021 Guide About Cryptocurrency Taxes in Australia

As cryptocurrencies continue to be on the rise and more people are embracing this new form of investment and income, it’s essential to know how taxes work with cryptocurrencies. The system itself is quite complex, and adding crypto taxes into the conversation can be overwhelming even to those already investing in it. If you’re planning on trying out cryptocurrencies, this guide should give you an overview of how taxes work with them.

How Does the ATO Monitor Your Crypto Transactions?

Cryptocurrencies are quite bigger in Australia than you might think. There are about 500,000 to a million Australians currently engaging in crypto trading and investment. To keep up with the number of people in crypto trading, the Australian Tax Office (ATO) started collecting records in late 2019 with the help of cryptocurrency designated service providers (DSPs). Through them, the ATO is able to collect records regularly about brokerage services and payment facilitators. DSPs also include cryptocurrency exchanges and ATM providers in bitcoin. Through this method, the ATO is able to find out if people who trade cryptocurrencies are paying their taxes correctly.

The type of information they collect from DSPs include details of the digital currency owner, including your name, address, date of birth, phone number, and email address. They also look into your account information, such as:

  • Status of Account

  • Connected Bank Accounts

  • Wallet Address

  • Unique Identifier

  • Transaction Dates and Times

This shows that every cryptocurrency transaction you make leaves an electronic record that is completely traceable by the Australian government. In fact, DSPs are required to collect all the information in compliance with the ATO’s standards.

Lodging Your Tax Returns with the ATO

Now that you know how the ATO knows all about your cryptocurrency transactions, you are compelled to include them when you lodge your tax return. Tax officers will compare your records with the ones they obtain from DSPs. This ensures that every Australian who lodges their tax returns are honest in disclosing their crypto activities.

The ATO’s Tax Guidelines for Cryptocurrencies

According to the ATO, cryptocurrencies are subjected to two types of transactions, depending on certain circumstances. For crypto traders, you either pay capital gains tax (CGT) or ordinary income tax. In some cases, you have to pay and file both.

If you’re not running a business, you don’t have to pay income tax or GST. All you need to do is pay for the item you purchased using cryptocurrency. However, in the eyes of the ATO, cryptocurrencies are regarded as CGT assets, meaning you need to pay for this certain tax whenever a transaction takes place using a cryptocurrency.

However, keep in mind that your transactions can be exempt from CGT as long as you use cryptocurrency to purchase goods and services for yourself and the transaction is worth $10,000 or less.


Those are just some of the things you need to know when it comes to cryptocurrencies and how they work with your taxes. With many traders buying or obtaining cryptocurrencies, people will eventually have a better understanding of how the system works.

Whether you’re a startup or looking to expand your business, New Wave Accounting is here to help you reach your goals. Rely on our business accountants in Gold Coast to provide an effective growth strategy to help your business grow. Get in touch with us today to book a consultation with our accountants.

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