Crypto mining tax in Australia: income on receipt, CGT on later disposal

How the ATO treats mining income

Whether you are carrying on a business in crypto mining decides how the ATO treats what you mine. If you are carrying on a business, either yourself or by providing services to a mining pool operator, the crypto assets you receive from mining are treated as trading stock of your business, and you account for their value at the end and the start of each income year. The ATO says not all crypto miners will be carrying on a business and that whether you are depends on your own circumstances. For a miner who is not in business, the ATO page on crypto mining states no cost base or other income tax rule for the coins, so this page does not state one: get tailored advice or an ATO private ruling before choosing a cost base.

Worked example

This example shows only the capital gains arithmetic and is not a statement of what the ATO allows. Suppose, purely for illustration, that the cost base of 0.01 BTC you mined is AUD 800. The ATO publishes no cost base rule for coins mined outside a business, so confirm yours with an adviser or an ATO private ruling. Eight months later, you sell that 0.01 BTC for AUD 1,200. The capital gain would be AUD 400 (AUD 1,200 proceeds minus AUD 800 cost base). Because you held the coins for less than 12 months, the 50% CGT discount would not apply to this disposal. If you carry on a mining business, the coins are trading stock instead, so this capital gains example does not apply to them.

Common pitfalls

The business versus not-in-business distinction is the most common source of confusion for miners. The ATO says whether you are carrying on a business depends on your own circumstances. Getting it wrong can change the whole treatment, because a business holds mined coins as trading stock. Keep detailed records of the date and AUD value of every receipt and of your mining expenses, and get tailored advice or an ATO private ruling when you are unsure.

Using this estimator for mining

The estimator models capital gains on disposal. Coins a mining business holds are trading stock, which this estimator does not model. If you hold mined coins outside a business and have settled their cost base with an adviser or an ATO private ruling, enter that cost base as a buy event and the disposal as a sell event. Do not use a staking_income event for mined coins.

Quick single-transaction estimate

Enter a single buy-and-sell scenario to see your estimated CGT impact.

Frequently asked questions

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