Cryptocurrency is no longer a niche topic for Australian bookkeepers. As of 2026, a significant proportion of small business owners hold or transact in Bitcoin, Ethereum, or other digital assets — and many of those transactions flow through business bank accounts in ways that are difficult to code without understanding the ATO's position.
The ATO's framework is clear: cryptocurrency is property for Australian tax purposes, not currency. Every time a client acquires, disposes of, or uses cryptocurrency, there may be tax consequences. This guide explains what bookkeepers need to know to handle crypto transactions correctly.
The ATO's position on cryptocurrency
The ATO has published substantial guidance on cryptocurrency tax treatment since 2014 and has significantly increased compliance activity since 2020. Key positions:
Cryptocurrency is a CGT asset. Acquiring cryptocurrency creates a CGT asset. Disposing of it (by selling, exchanging, using it to buy goods or services, gifting it, or losing access to it permanently) is a CGT event. Capital gains or losses are recognised at disposal.
Crypto-to-crypto swaps are disposal events. Exchanging Bitcoin for Ethereum is a disposal of Bitcoin (CGT event) and an acquisition of Ethereum. Each swap creates a taxable event — this surprises many clients who assume swapping one cryptocurrency for another is tax-neutral.
Using crypto to pay for goods or services is a disposal. A client who uses Bitcoin to pay a supplier has disposed of the Bitcoin at its AUD value at the time of payment. If the Bitcoin was acquired at a lower price, a capital gain arises.
Mining income is assessable. Cryptocurrency received through mining is assessable income at its AUD market value at the time of receipt. If the mined crypto is later sold at a profit, the additional gain is also assessable.
GST on crypto: The ATO's position is that cryptocurrency is not money for GST purposes. Supplies of cryptocurrency are generally input-taxed financial supplies. This means no GST is charged on the sale or exchange of crypto, and no ITC is claimable on crypto purchases (unless the crypto is acquired in the ordinary course of a business that trades crypto).
The record-keeping challenge
The fundamental challenge of cryptocurrency bookkeeping is completeness. Crypto transactions often don't appear in the client's bank feed — they happen on exchanges (Coinbase, CoinSpot, Binance) or on-chain. Only when crypto is converted to AUD and deposited into a bank account does a transaction appear in the bank feed.
This means a client can have extensive crypto activity that is entirely invisible to the bookkeeper who only sees the bank statements.
What the bookkeeper needs from the client:
- Complete transaction history exports from all cryptocurrency exchanges (CSV format is available from all major exchanges)
- Wallet address histories if any on-chain transactions occurred outside exchanges
- Records of any crypto-to-crypto swaps
- Records of any goods or services purchased with crypto
- Records of mining income received (amounts and dates)
Without this information, the bookkeeper cannot accurately reconcile the client's finances or calculate capital gains for the tax agent.
What appears in the bank feed and how to code it
The transactions that do appear in the bank feed typically look like:
| Bank description | What it is |
|---|---|
| CoinSpot AUD deposit | Client transferred AUD to a crypto exchange to buy crypto |
| CoinSpot AUD withdrawal | Client sold crypto and withdrew AUD proceeds |
| Payment from crypto exchange | Proceeds from crypto sale |
| BSB/account transfer from exchange | AUD conversion proceeds |
Coding AUD deposited to an exchange: The client is purchasing a CGT asset. Code this as an investment in a crypto asset, not as a business expense. In the Chart of Accounts, a dedicated account like "Cryptocurrency Holdings" (asset account) captures the cost base of purchased crypto.
Coding AUD received from exchange: The client has sold crypto. The AUD proceeds are the sale price. The bookkeeper cannot calculate the capital gain without the cost base — that requires the exchange history records. Code the receipt to a "Crypto Proceeds Received" account pending the tax agent's CGT calculation.
Do NOT code crypto transactions as business income or business expense unless the client is specifically in the business of trading cryptocurrency (i.e., holds an AFS licence for digital asset services or operates a business trading crypto for profit in a commercial manner). For investment-held crypto, all proceeds are capital, not revenue.
Crypto received as business income
Some Australian businesses accept cryptocurrency as payment for goods or services. This is different from investment crypto and is treated as business income:
- At the time of receipt, the crypto's AUD market value is assessable income (same as if the customer paid in AUD)
- Code to business income at the AUD value on the date of receipt
- The crypto's cost base for CGT purposes is that same AUD value (the income already taxed at receipt is the base for any future capital gain calculation)
When the crypto is later sold, the capital gain or loss is calculated against that cost base. If the client holds it for more than 12 months before selling, the 50% CGT discount may apply.
DeFi, staking, and yield farming
Newer crypto activities create additional complexity:
Staking rewards: Receiving staking rewards (interest-like income from holding proof-of-stake cryptocurrency) is assessable as ordinary income at the AUD value at the time of receipt. The ATO published guidance in 2022 confirming this treatment.
DeFi liquidity provision: Providing liquidity to decentralised finance protocols (receiving LP tokens in exchange for depositing tokens) may involve a CGT disposal at the time of the exchange, depending on whether the LP tokens are materially different assets from the original deposits.
NFTs: Non-fungible tokens are treated as CGT assets. The same disposal rules apply as for other cryptocurrency.
These areas are rapidly evolving and the ATO's guidance is updated periodically. For clients with significant DeFi activity, referral to a tax agent with specialist crypto experience is appropriate.
Practical bookkeeping steps for clients with crypto
Step 1: Identify crypto transactions in the bank feed. Flag all bank transactions from or to cryptocurrency exchanges. Code these to holding accounts pending full reconciliation.
Step 2: Request exchange history exports. Ask the client to export their complete transaction history from every exchange they use (buy/sell/withdraw/deposit reports). Most exchanges provide CSV exports.
Step 3: Match exchange records to bank feed. Reconcile AUD deposits to and withdrawals from exchanges against bank feed transactions. Any unmatched items require investigation.
Step 4: Identify cost base for all holdings. For each cryptocurrency held, identify the acquisition price (in AUD) and acquisition date. This is the cost base for CGT.
Step 5: Pass to tax agent. The calculation of capital gains, application of the 50% discount, and CGT reporting on the tax return is the tax agent's responsibility. The bookkeeper's role is to provide clean records showing all acquisitions and disposals with AUD values.
What NOT to do
Do not code crypto sale proceeds as business income for investment-held crypto. Capital proceeds are not income. They go to a proceeds account pending CGT calculation.
Do not assume a client only uses one exchange. Clients regularly use multiple exchanges and hold wallets across platforms. Always ask.
Do not try to calculate capital gains without professional tools. Manual CGT calculations across hundreds of crypto transactions are error-prone. Specialised crypto tax tools (Koinly, CryptoTaxCalculator, Syla) import exchange data and calculate gains automatically. These tools integrate with accounting software for import into the tax return.
Frequently asked questions
Is crypto income subject to GST?
For most clients: no. Selling cryptocurrency is treated as an input-taxed financial supply. No GST is charged on the sale, and no ITC is claimable by the buyer. The exception is businesses that trade crypto commercially as part of their enterprise (rare outside of exchanges and brokers).
Does a client need to report crypto if they only bought and held — no sales?
No CGT event arises until disposal. A client who bought Bitcoin and held it all year has no reportable event for that year — but must keep records of the acquisition for future CGT calculation.
What if the client lost access to their crypto (lost password/keys)?
The ATO's position is that lost access to private keys is not a disposal event. The client still holds the asset — they just cannot access it. A CGT event only arises when the client can demonstrate they have permanently lost the asset. This is a complex area requiring tax agent advice.
This article was last reviewed on 27 May 2026. The ATO's cryptocurrency guidance evolves. Always confirm current treatment at ato.gov.au/crypto. This is general guidance, not specific tax or legal advice.