Alright, so in Australia, how your trading is taxed comes down to if you’re seen as a trader or an investor. If you’re a trader – meaning you trade a lot, have a system, and are trying to make income from it – your profit is seen as regular income. It’s taxed at your normal tax rate, no matter how long you held things. This usually hits short-term traders and those using things like CFDs. The good thing is, you can usually deduct losses and trading costs. Now, if you’re considered an investor holding a forex position for over a year, your gains are taxed as capital gains.

As an individual, you might even get a 50% discount on that tax, but only if you’re not running a trading business. Hold the investment fewer than 12 months? Then it’s taxed at your usual income rate, no discount involved. Just so we’re clear: mainly traders with short term positions pay with income tax, not capital gains. Things like CFDs, get taxed as income, no matter how long you held them. So, trade CFDs a lot for under a year? Your gains get added to your income and taxed at your rate, like business income. Hold positions longer than a year, you might get capital gains treatment and a tax discount. But again, only if you’re an investor. Either way, keep good records of your trades and fees. Trade confirmations, statements, records of deposits/withdrawals, and any platform logs. You’ll need all of it when you file taxes.