Australian crypto investors must report profits to the Australian Tax Office (ATO) or face penalties and audits. The ATO classifies cryptocurrency as an asset, not a currency. Many taxpayers mistakenly believe crypto gains are tax-free or only taxable when converted to Australian dollars. Assistant Commissioner Tim Loh clarified that crypto gains are akin to share gains, subject to capital gains tax (CGT) when bought, sold, swapped for fiat, or exchanged for other cryptocurrencies. Movements within digital wallets also trigger CGT, and holding crypto for at least 12 months may qualify for a CGT discount.
The ATO notes some taxpayers believe crypto’s anonymity exempts them from tax obligations. However, the ATO tracks crypto interactions with banks, financial institutions, and exchanges to trace funds back to taxpayers, matching data to tax returns.
This reflects growing enforcement of crypto regulations, with hints of tighter rules ahead. In contrast, Hong Kong does not tax capital gains but is tightening its regulatory regime under anti-money laundering rules, restricting crypto exchanges and limiting services to professional investors.
