Key takeaways
- Magic Eden does not report directly to the Australian Taxation Office (ATO).
- The ATO can still track your NFT activity through blockchain analysis and its crypto data-matching program.
Cryptocurrency exchanges around the world are starting to report more and more information to government agencies. In this guide, we analyze Magic Eden’s tax reporting policies within Australia. We’ll also break down a simple way to report your Magic Eden taxes in minutes.
What is Magic Eden?
Magic Eden is a decentralized NFT marketplace and aggregator that supports trading across blockchains like Solana and Ethereum.Â
Because it is non-custodial, Magic Eden does not collect Know Your Customer (KYC) information and does not issue tax forms. You are responsible for tracking and reporting your taxable NFT activity to the ATO.
Does Magic Eden report to the ATO?
No. Magic Eden does not share customer data with the ATO or issue tax documents.
That said, the ATO has tools in place to track NFT transactions:
- Blockchain analysis: Every transaction on Solana, Ethereum, and other supported blockchains is public and traceable.
- Data-matching program: The ATO operates a crypto data-matching program that pulls records from AUSTRAC-registered exchanges and compares them against taxpayer filings. If you transfer crypto to/from an exchange with KYC, it's likely your wallet can be identified.
The Crypto-Asset Reporting Framework (CARF) will begin in 2027, requiring Australian exchanges and custodial wallet providers to collect and share detailed customer data. This will give the ATO more data to connect wallets with known taxpayers.
If I use Magic Eden in Australia, do I owe taxes?
Yes. NFT transactions on Magic Eden are taxable under Australian law:
- Capital gains: Selling or swapping NFTs is considered a Capital Gains Tax (CGT) event. If you hold an asset for more than 12 months before selling, you may qualify for the 50 percent CGT discount.
- Income: NFT airdrops, staking rewards, or creator royalties are taxed as income based on fair market value upon receipt.Â
Moving NFTs or crypto between your own wallets is not taxable.
Does Magic Eden have KYC?
No. Magic Eden does not require identity verification.
Is Magic Eden legal in Australia?
Yes. Magic Eden is legal to use in Australia.Â
You are required to report capital gains and income from NFTs to the ATO.
How do I avoid Magic Eden taxes in Australia?
While there’s no way to evade paying taxes in Australia, there are a few ways to legally reduce your tax bill:Â
- Tax-loss harvesting: When you sell NFTs or crypto at a loss, you can offset your capital gains and lower your tax bill. ‍
- Use crypto tax software: Crypto tax software like CoinLedger can import NFT transactions from Magic Eden and other platforms, then show you where you can save money on your taxes.
Looking for a simple way to report your Magic Eden taxes? With CoinLedger, you can import your Magic Eden transactions and auto-generate a complete gains, losses, and income tax report in minutes.
CoinLedger integrates with Magic Eden and dozens of other wallets, blockchains, and cryptocurrency exchanges to automate the entire crypto tax reporting process.
You can get started with a free preview report today.
How CoinLedger can help
Manually keeping track of every NFT purchase, sale, and swap can be overwhelming. CoinLedger helps simplify the process.Â
CoinLedgers allows you to import transactions from Magic Eden and hundreds of other platforms, automatically calculate capital gains and income from NFTs and crypto, and generate ATO-compliant tax reports in minutes.Â
Get started with a free CoinLedger account today.
