How the capital gains tax works for crypto deductions
How the capital gains tax works for crypto deductions
Current on: 11 August 2025
Short conclusion
In Australia, the withdrawal of cryptocurrency to fiat or exchange for other assets is considered a taxable event under the rules of capital gains tax (Capital Gains Tax, CGT). The amount of tax depends on the difference between the value of the crypto asset at the time of receipt and at the time of sale, as well as on the period of ownership.
1. What is CGT and when is it applied
Capital Gains Tax - income tax earned on the sale or exchange of an asset.
For cryptocurrency is applied at the moment:
2. Determination of asset base value
Cost base = market value of the cryptocurrency in AUD at the time of winning.
If the price has risen by the time of sale, capital gain arises.
If the price has fallen, a capital loss is recorded, which can be offset against future profits.
3. Rates and benefits
The CGT is calculated on the player's income tax rates.
If you own an asset for more than 12 months, you can get a discount of up to 50% for individuals.
For companies, the discount is not applied - the entire amount of profit is taxed.
4. Example of CGT calculation during crypto withdrawal
Situation:
Calculation:
If the player held the asset for 14 months, capital gain would also be AUD 15,000, but only AUD 7,500 (50% discount) would be included in the tax base.
5. Reporting responsibilities
Fix the cryptocurrency rate at the time of receipt.
Store confirmations of transactions (transactions, screenshots, extracts from casinos and exchanges).
Specify all CGT events in the tax return.
6. Important nuances for gamblers
For gambling enthusiasts, CGT only occurs when cryptocurrency is sold or exchanged.
For professionals, gains from cryptocurrency winnings can be subject to income tax immediately upon receipt, and subsequent capital gains separately.
A cryptocurrency transfer between your wallets is not considered a taxable event unless you exchange it for another asset.
7. Recommendations to reduce tax burden
Plan the moment of withdrawal taking into account market dynamics.
If possible, hold the asset for more than 12 months to apply the discount.
Use specialized crypto transaction accounting services.
Consult with an accountant familiar with ATO cryptocurrency rules.
Conclusion
The capital gains tax on crypto withdrawals in Australia depends on the difference in the price of the asset between the time of receipt and the time of sale, as well as on the period of ownership. For gamblers, this means that the tax burden does not arise when winning, but when converting cryptocurrency into money or other assets.
Current on: 11 August 2025
Short conclusion
In Australia, the withdrawal of cryptocurrency to fiat or exchange for other assets is considered a taxable event under the rules of capital gains tax (Capital Gains Tax, CGT). The amount of tax depends on the difference between the value of the crypto asset at the time of receipt and at the time of sale, as well as on the period of ownership.
1. What is CGT and when is it applied
Capital Gains Tax - income tax earned on the sale or exchange of an asset.
For cryptocurrency is applied at the moment:
- Exchange for fiat money.
- Exchange for another cryptocurrency.
- Use to purchase goods or services.
- Getting a cryptocurrency win is not a CGT event, but its subsequent sale is.
2. Determination of asset base value
Cost base = market value of the cryptocurrency in AUD at the time of winning.
If the price has risen by the time of sale, capital gain arises.
If the price has fallen, a capital loss is recorded, which can be offset against future profits.
3. Rates and benefits
The CGT is calculated on the player's income tax rates.
If you own an asset for more than 12 months, you can get a discount of up to 50% for individuals.
For companies, the discount is not applied - the entire amount of profit is taxed.
4. Example of CGT calculation during crypto withdrawal
Situation:
- The player received 1 BTC as a win at AUD 40,000.
- After 8 months sold for 55,000 AUD.
Calculation:
- Cost base = 40 000 AUD.
- Sale = 55,000 AUD.
- Capital gain = 15 000 AUD.
- CGT is charged for the entire profit amount, the discount is not applied (term <12 months).
If the player held the asset for 14 months, capital gain would also be AUD 15,000, but only AUD 7,500 (50% discount) would be included in the tax base.
5. Reporting responsibilities
Fix the cryptocurrency rate at the time of receipt.
Store confirmations of transactions (transactions, screenshots, extracts from casinos and exchanges).
Specify all CGT events in the tax return.
6. Important nuances for gamblers
For gambling enthusiasts, CGT only occurs when cryptocurrency is sold or exchanged.
For professionals, gains from cryptocurrency winnings can be subject to income tax immediately upon receipt, and subsequent capital gains separately.
A cryptocurrency transfer between your wallets is not considered a taxable event unless you exchange it for another asset.
7. Recommendations to reduce tax burden
Plan the moment of withdrawal taking into account market dynamics.
If possible, hold the asset for more than 12 months to apply the discount.
Use specialized crypto transaction accounting services.
Consult with an accountant familiar with ATO cryptocurrency rules.
Conclusion
The capital gains tax on crypto withdrawals in Australia depends on the difference in the price of the asset between the time of receipt and the time of sale, as well as on the period of ownership. For gamblers, this means that the tax burden does not arise when winning, but when converting cryptocurrency into money or other assets.
