Australia – Crypto Tax Classifications and Policies 2021 – ATO Guidelines

Australia specific crypto tax classifications are are not that easy to understand and there are different regulations and exceptions. Many experts too find it challenging to keep up with the rapidly changing crypto tax landscape, so if you find the whole ordeal a little confusing — you are not on your own!

We partnered up with local tax experts so that we can provide all the knowledge you need to be able to file your tax report by yourself. You should definitely read this article if you:

  • are interested in crypto taxation for Australia
  • need to report your crypto taxes in Australia
  • want to learn more about the specific classifications for Australia

Now let’s deep dive into all the classifications you can find in ACCOINTING.com so that you understand the consequences of the different Income and Disposal taxations.

Australian Tax Authority (ATO) Guidelines

Note:

The ATO typically classifies cryptocurrencies as ‘property‘ that is subject to capital gains tax (CGT) however, this is often overlooked by both new and seasoned crypto investors.

The following Australia-specific crypto tax classifications describe how deposits get treated in the Tax Report in terms of taxable or not taxable events and how their cost basis gets calculated. You will find the statement for the Incoming transactions in the FullTaxReport.pdf and in the Fulldataset.xls export they are either summed up in the Taxable income table or the non-taxable income table depending on their classification.

The cost basis is defined by the type as well, if you acquired the asset in a trade (e.g. swap, buy, otc,…) ACCOINTING.com defines the cost basis with the value of the sell-side of this trade. If you received the asset as for example an Airdrop ACCOINTING.com will define the cost basis based on the price the asset has at the receiving date.

Airdrop:

The ATO defines an Airdrop as an ordinary income tax if the money value of an established token received through an airdrop is classified as ordinary income of the recipient at the time it is derived.

8. Classifications

Incoming transactions / deposit:

Classification type (incoming transaction)Taxable or not taxable?Definition of Cost basis
No classificationTaxable incomeMarket value on the sell date
Buy tradeNot taxableMarket value on the sell date
OTC tradeNot taxableMarket value on the sell date
ICO tradeNot taxableMarket value on the sell date
Hardfork Not taxable Market value on the sell date
Airdrop Not taxable Market value on the sell date
Mining (as a hobby)* Not taxable Market value on the sell date
Bounty Taxable income Market value on the sell date
Masternode incomeTaxable incomeMarket value on the sell date
Staking IncomeTaxable incomeMarket value on the sell date
Received giftNot taxableMarket value on the sell date
Swap (DEX)Not taxableValue of the receiving date.(if there is an amount on the sell side, you can select it as OTC and use the proceeds from the sell side)
Income from gambling Not taxable Market value on the sell date
Add fundsNot taxableMarket value on the sell date
Income (for a service)Taxable incomeMarket value on the sell date
Liquidity pool incomeTaxable incomeMarket value on the sell date
ReconcileTaxable incomeMarket value on the sell date
Lending IncomeTaxable incomeMarket value on the sell date
Margin gainTaxable margin trade income (separate table in the report)Market value on the sell date
Definition of the taxable or not taxable event created by deposit classifications

*if you do mining as a business you can offset costs (electricity, etc.) from the mining income. If you receive tokens from mining and are not trading, the tokens will be treated as other taxable income.

Withdraws or sell actions create disposals

For Australia-specific tax classifications, it is only important how the asset got disposed of (sold/withdrawn).

The margin losses and margin fees are all summed together with the margin gains in the fulltaxreport.pdf and use the proceeds of the transaction date to define the gains. They don’t create taxable disposals, meaning when a tax lot gets closed because of a margin loss or fee it will create non-taxable disposal in the export files.

Transactions fees of internal transactions (e.g. from your exchange to your wallet) will show up in ACCOINTING.com’s Full Tax Report pdf summed up in a separate table.

Classification type (outgoing transaction)Taxable or not taxable?Definition of Cost basisSummed up in
No classificationTaxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
Sell tradeTaxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
OTC trade Taxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
ICO trade Taxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
Swap Taxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
Payment (outgoing transfer to someone else)Taxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
Used for gamblingTaxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
Gift sent*Taxable DisposalMarket value on the sell date Non taxable disposal in full tax report
Lost**Not taxable disposalMarket value on the sell date Non taxable disposal in full tax report
Remove fundsNot taxable disposalMarket value on the sell date Non taxable disposal in full tax report
ReconcileTaxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
FeeTaxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
Interest paidTaxable DisposalMarket value on the sell date Taxable disposal as capital gains in full tax report
Margin lossNo disposal tax, but proceeds summed up in margin tableProceeds: Value at the dateNon taxable disposal in Full tax report and taxable loss in Margin table
Margin feeNo disposal tax, but proceeds summed up in margin tableProceeds: Value at the dateNon taxable disposal in Full tax report and taxable loss in Margin table
Definition of the taxable or not taxable event created by withdraw classifications

* unless it’s a gift to your spouse or civil partner. If thats the case, classify it as “Remove funds”

** If the coin goes to 0, you can offset this loss but if you lose it / or it gets hacked you can’t easily claim a loss. You will have to argue with the ATO if they accept this as a loss or not. It makes sense to talk to a tax expert for this.

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