Do You Pay Tax When You Buy Cryptocurrency with AUD?

  • July 14 2025
  • 4 min read
crypto tax article graphic

With the popularity of digital assets on the rise, many Australians are asking: Do I pay tax when I buy cryptocurrency with AUD? Understanding your tax obligations is crucial to avoid surpises at tax time.

The Australian Taxation Office (ATO) and Cryptocurrency

The Australian Taxation Office (ATO) classifies cryptocurrency as property, not as money or foreign currency. This means cryptocurrencies like Bitcoin, Ethereum, and others are considered assests for tax purposes, and their tax treatment is governed by capital gains tax (CGT) and in, some cases, income tax. 

Buy Cryptocurrency with AUD: Is It Taxable?

The good news:

  • You do NOT pay tax when you buy cryptocurrency with Australian dollars (AUD).
  • The purchase itself is a tax-free event for both investors and traders. 

Why Is Buying Cryptocurrency with AUD Tax-Free?

  • The ATO only taxes you when a “taxable event” occurs.
  • Buy cryptocurrency with AUD is not considered a disposal or realisation of a capital gain. 
  • GST (Goods and Services Tax) does not apply to the purchase of cryptocurrency with AUD, as crypto is treated as a financial supply and is GST-free. 

When Do You Pay Tax on Cryptocurrency?

While buying crypto is not a taxable event, you may incur tax obligations in the following situations:

  • Selling crypto for AUD or another fiat currency: This is a disposal and triggers capital gains tax. 
  • Swapping one crypto for another: This is also treated as a disposal for CGT purposes. 
  • Using crypto to purchase goods or services: If the crypto is not a “personal use asset,”this may trigger a CGT.
  • Earning crypto through mining, staking, airdrops, or as payments: This is generally treated as ordinary income and taxed at your marginal rate. 

Record-Keeping Requirements

Even though buy crypto is tax-free, you must keep detailed records for every transaction, including:

  • Date of purchase
  • Amount paid in AUD
  • The type and quantity of cryptocurrency acquired
  • Details of the exhange or platform used

Maintaining accurate records is essential for calculating your case base when you eventually seel or dispose of your crypto assets.

Important Considerations

  • Personal Use Asset Exemption: If you buy crypto soley to purchase goods or services for personal use (and the cost is under $10,000), you may be exempt from CGT. However, this exepmtion is narrowly applied and does not cover investment or trading activity. 
  • Long-Term Holding Discount: If you hold your crypto for more than 12 months before selling, you may be eligible for a 50% CGT discount. 
  • ATO Monitoring: All major Australian exchanges report customer data to the ATO. Failing to report taxable events can lead to significant penalties. 

Conslusion

In summary:

  • You do not pay tax when you buy cryptocurrency with AUD in Australia. 
  • Tax obligations arise when you sell, swap, or otherwise dispose of your crypto, or when you earn crypto as income. 
  • Keep thorough records from the moment you buy, to ensure compliance and make tax time easier. 

For the most accurate tailored to your circumstances, consult a qualified tax professional or refer directly to ATO guidance. 

This article is intended for informational purposes only and does not consitute financial or tax advice.