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A co-branded guide by Tax On Chain and Swyftx
If you sold, swapped or transacted with crypto onchain this year, the ATO expects that activity to be reported in your tax return. This guide covers the basics for spot trading and investing in 2026, with a quick look at DeFi.
Crypto is an asset, not money, for Australian tax purposes
The ATO treats cryptocurrency as a capital gains tax (CGT) asset, not as money. For most investors, that single point explains much of how crypto is taxed. When you dispose of a crypto asset, you will generally trigger a CGT event and need to work out whether you made a capital gain or a capital loss.
A disposal is broader than simply cashing out to Australian dollars. You dispose of crypto when you sell it for AUD, swap one cryptocurrency for another, use it to pay for goods or services, spend it on blockchain transaction fees (gas fees), or gift it to someone else.
The common surprise for newer investors is the swap. Trading Bitcoin for Ethereum on an exchange like Swyftx is a taxable event, even though no Australian dollars change hands. The ATO values the disposal in AUD at the time of the trade.
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Capital gains, losses and the 12-month rule
Your capital gain is the difference between what you paid, known as your cost base, and what you received on disposal. Sell for more than your cost base and you have a gain. Sell for less and you have a capital loss.
Capital losses can be valuable. You can use them to offset capital gains in the same income year, and any unused losses can be carried forward to future years. However, capital losses cannot be used to offset ordinary income, including salary and wages, staking rewards, interest, or other assessable income.
If you hold a crypto asset for more than 12 months before disposing of it, you may qualify for the 50% CGT discount. This means only half of the capital gain is included in your taxable income. For many investors, holding assets for at least 12 months is one of the simplest ways to improve the tax outcome of a profitable investment.
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The 50% CGT discount applies under the current rules.
Important to Remember
The government announced proposed changes in the 2026 Federal Budget that would affect how capital gains are taxed from 1 July 2027. These measures are not yet law and remain subject to change. Tax On Chain has published a detailed breakdown of the proposed changes if you want to understand what has been announced.
Investor or trader? It changes the treatment
How the ATO classifies you matters. Most people who buy and hold for the medium to long term are investors, and their gains fall under the CGT regime. Someone who trades frequently and in a business-like way may be a trader, and their profits are treated as ordinary income instead.
Traders do not get the 50% CGT discount, but they can claim a wider range of deductions. There is no single test. The ATO looks at your volume, frequency, intention and how organised your activity is. If you are unsure which side of the line you sit on, get advice before you lodge.
DeFi and staking are taxable too
Decentralised finance (DeFi) and onchain activity do not sit outside the tax system, nor are they invisible to the ATO. While blockchain transactions may not occur through a traditional financial institution or exchange, they are recorded on public blockchains where transaction histories can be viewed by anyone. As a result, activity can easily be traced and linked to individuals through exchange records, wallet analysis and other data sources.
The tax treatment depends on the specific activity, but two principles cover many common DeFi scenarios.
First, when you receive new tokens as a reward - for example from staking - the ATO generally treats the AUD value of those tokens as ordinary income at the time they are received, similar to interest earned on a bank account. That value then becomes the cost base of the tokens. If you later sell, swap or otherwise dispose of them, a separate CGT event occurs and you calculate a capital gain or loss based on the change in value since receipt.
Second, many DeFi transactions involve disposing of one asset in exchange for another, such as a receipt token or liquidity provider (LP) token. This means that moving assets into lending protocols, liquidity pools or other DeFi arrangements can sometimes trigger CGT consequences even where no Australian dollars are involved.
Lending, liquidity pools and other DeFi activities each have their own complexities and careful consideration should be given to the tax implications before engaging in these activities, as it is easy to inadvertently trigger a CGT event without realising it.
Records and ATO data matching
The ATO operates a comprehensive crypto data-matching program and receives information from cryptocurrency exchanges. Combined with blockchain analytics tools, crypto activity is often far more visible than many investors realise.
The onus is on the investor to maintain sufficient records to substantiate the gains, losses and income reported in their tax return. Keep records of transaction dates, AUD values, fees, wallet addresses and transaction hashes.
Most exchanges, including Swyftx, provide detailed transaction histories and EOFY reports that can assist with this process. However, exchange reports will not capture activity that occurs away from the exchange, such as transactions involving private wallets, self-custody or DeFi protocols, making good record-keeping essential. Where maintaining such records seems overwhelming or overly complicated, engaging a specialist crypto accountant can save significant time and help reduce the risk of errors in your tax reporting.
The bottom line
Crypto tax in 2026 doesn’t have to be overly complicated. The key is understanding that crypto is treated as a CGT asset, recognising when a disposal occurs, and maintaining adequate records to support the gains, losses and income reported in your tax return.
If your activity extends beyond simply buying and selling on an exchange - particularly where it involves DeFi, self-custody, larger portfolios or a self-managed super fund (SMSF) - specialist advice can often pay for itself through improved tax outcomes and avoiding costly reporting errors. Tax On Chain works with crypto investors across Australia and can help ensure your activity is accurately reconciled, reported and compliant. If you'd like to discuss your position, book a consultation with our team.
This article is general information only and has been prepared by Tax On Chain and does not constitute personal tax, financial or legal advice. Tax laws and Government policy are subject to change. Speak to a qualified adviser about your specific circumstances before making any decisions.