How Is DeFi Taxed in Australia?
DeFi packs multiple taxable events into a single transaction. Here is how lending, liquidity pools and yield are generally treated in Australia.
DeFi is where crypto tax gets genuinely hard, because a single click can be several taxable events at once.
Rewards are income
Yield from lending, liquidity provision or protocol incentives is generally ordinary income, valued in Australian dollars when you receive it. That applies whether the reward is paid in the token you deposited or a different one.
Many actions are disposals
Depositing into a pool, receiving a liquidity or receipt token, and wrapping or unwrapping coins can each be treated as disposing of one asset for another. If so, that triggers a capital gains tax event, even though it feels like moving your own money around.
Why it is easy to get wrong
A single DeFi strategy can generate income events and CGT events on entry, along the way, and on exit. The transactions are technical and the tax treatment can be uncertain, so records and advice both matter here.
Untangle the transactions
Summ reads your on-chain activity and separates the income and disposal events inside your DeFi transactions.
This article is general information only and does not take your personal circumstances into account. DeFi tax is complex, so consider advice from a registered tax agent.
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