ATO Cryptocurrency Tax Guidelines
Dependent on your activities you may fall under one of four major taxation categories. The
categorisation of your activity will have important implications on how your tax and accounting
If you have a particularly challenging taxation situation then a private ruling from the ATO may be
required. A specialist accountant can engage with the ATO on your behalf to ensure the best
opportunity for a favourable ruling.
Personal Use Asset
Cryptocurrency may be a personal use asset if it is kept or used mainly to purchase items for
personal use or consumption. Only capital gains you make from personal use assets acquired
for less than $10,000 are disregarded for CGT purposes. However, all capital losses you make
on personal use assets are also disregarded.
Investor - CGT Rules
If you acquire cryptocurrency as an investment, you may have to pay tax on any capital gain
you make on disposal of the cryptocurrency. As an investor, if you
hold your cryptocurrency as an investment for 12 months or more, you may be entitled to the
CGT discount to reduce a capital gain you make when you dispose of it.
Business Purpose - Trading Stock
If you hold cryptocurrency for sale or exchange in the ordinary course of your business the
trading stock rules apply, and not the CGT rules. Proceeds from the sale of cryptocurrency
held as trading stock in a business are ordinary income, and the cost of acquiring
cryptocurrency held as trading stock is deductible
Trading vs Investing
An investor is a person who holds assets for the purpose of earning income from dividends and
A trader is a person who carries out business activities for the purpose of earning income
from buying and selling of assets.
You can get an understanding of where you may be categorised by considering the similarities
with share-holding vs share-trading at the link below.