If you trade with a foreign cryptocurrency exchange, you may be subject to tax obligations in other countries. If you need help understanding how this information applies, please contact us and consult our team of experts.

Follow these 3 steps to help you manage your tax responsibilities with cryptocurrency:

Report Disposal of cryptocurrency

You must report the disposal of cryptocurrency for capital gains tax purposes. Disposing occurs when you either:

• exchange one cryptocurrency for another cryptocurrency
• trade, sell or gift cryptocurrency
• convert cryptocurrency to a fiat currency (a currency established by government regulation or law), for example to Australian dollars (A$).

Work Out any CGT (Capital Gains tax)

If you exchange cryptocurrency for assets, cash, or other cryptocurrencies, this is generally considered a settlement for the purposes of (CGT) and you may need to include a capital gain or loss in your tax return.

To work out your capital gain or loss, you need to determine the value of your cryptocurrency purchases and sales in Australian dollars. A capital gain or loss is the difference between the:

• cost base (cost of ownership, including the purchase price plus certain other costs associated with acquiring, holding, and disposing of it)
• capital proceeds (what you receive or the market value of what you receive) when you dispose of your cryptocurrency.

Keep Records

You need to keep records of all transactions associated with acquiring, holding, and disposing of cryptocurrency. You need to keep records for five years after you dispose of the cryptocurrency.