How ETFs are taxed in Australia

• The fund's annual tax statement tells you what to put on your tax return, and where.
• Some amounts on that statement change the cost base of your units, which changes your gain when you sell.
• Selling units works like selling shares: the 12-month discount, losses and the cost base all apply.

An ETF collects dividends, interest and gains from what it holds and passes them on to unit holders as distributions, often each quarter or each half year. You declare your share on your tax return as income.

• Reinvested distributions count too. If you are in the fund's distribution reinvestment plan, you still declare the distribution, even though no cash reached your account.
• The year it relates to, not the year it is paid. The June distribution is usually paid in July, but it belongs to the financial year that ended on 30 June.
• Franking credits can come with it. An ETF that holds Australian shares passes on their franking credits. See franking credits explained.

After 30 June each fund sends a tax statement for the year. It may be called an annual statement, a standard distribution statement (SDS) or an AMMA statement (attribution managed investment trust member annual statement). It splits the year's distributions into parts and gives the tax return label for each:

• Australian income such as interest and unfranked dividends.
• Franked distributions and their franking credits.
• Capital gains the fund made, some already discounted.
• Foreign income and any foreign tax already paid on it.
• Amounts that aren't taxed now but change your cost base.

The figures are usually prefilled in myTax, but check them against the statement. Funds listed overseas generally don't send an Australian statement, so you work the income out from your own records and declare it as foreign income.

When a fund sells something at a profit, part of the distribution can be a capital gain. The statement shows it as a discounted gain, an indexed gain or another gain. Like your own gains, these go in the capital gains part of your return, so your capital losses can come off them first.

A discounted gain from the fund has already been halved. To apply your own losses fairly, you gross it back up (double it), take off your losses, and then apply the discount again. The statement's total current year capital gains figure is the grossed-up amount.

Most Australian ETFs are attribution managed investment trusts (AMITs). Each year the fund works out what it attributed to you for tax and what it actually paid you. The difference is the AMIT cost base net amount, shown on the statement:

• An excess (you were paid more than you were taxed on) lowers your cost base. If it would take the cost base below nil, the rest is a capital gain.
• A shortfall (you were taxed on more than you were paid) raises your cost base, so the same income isn't taxed again as a gain when you sell.

A fund that isn't an AMIT shows tax-deferred amounts instead, which lower the cost base. Each adjustment is small, but over ten years of holding they can move your gain by hundreds of dollars.

Made-up example: you bought 100 units for $10,000, brokerage included. Over four years the statements show excesses of $120, $95, $140 and $110. Your cost base is now $9,535, and if you sell for $12,000 the gain is $2,465, not $2,000.

Units you get through a distribution reinvestment plan are a new purchase. Each one costs the amount of the distribution used to buy it, and its 12 months start from the day it was issued. When you sell part of a holding, you need to know which units were sold. The same rules apply to companies' plans, covered in dividend reinvestment plans.

Selling units is a CGT event, the same as selling shares. Your gain is what you got for them, less brokerage, less the cost base after the yearly adjustments above. Hold the units at least 12 months and, as an Australian resident individual, you can usually take 50% off the gain after losses. See capital gains tax on shares and the 50% CGT discount.

For an ETF listed overseas, every amount is converted to Australian dollars at the rate on the day: the purchase at the rate on the day you bought, and the sale at the rate on the day you sold.

I didn't sell anything. Do I still have capital gains?

You can. If the fund made gains and passed them on, your statement shows them, and they go on your return even if you never sold a unit.

Do I need to keep every statement?

Yes, for as long as you hold the units and for five years after the financial year you sell them. The cost base adjustments in old statements decide the gain on the day you sell.

Are ETFs taxed differently from managed funds?

Not much. Both are usually trusts with the same distribution and statement rules. The difference is that you buy and sell ETF units on the market, through a broker.

On each ETF's page in Portfoli.au you can add its annual tax statements. Their capital gains go into your yearly capital gains, with losses applied first, and the cost base net amount changes the cost base of the units you still hold, so the gain is right when you sell. Distributions are estimated from each ex-dividend date in the meantime.

How to add an annual tax statement, or start free with up to 12 ASX shares and ETFs.

• ATO, Exchange traded funds (updated 22 June 2026)
• ATO, Trust distributions (Guide to capital gains tax)
• ATO, AMMA statement or SDS example

Check with a registered tax agent before you act.

• Franking credits explained: What franking credits are, how a dividend is grossed up, refunds, and the 45-day rule.
• Dividend reinvestment plans and tax: Why a reinvested dividend is still income, and the records each new purchase needs.
• Capital gains tax on shares in Australia: When you pay tax on selling shares or ETFs, how the gain is worked out, and what to do with a loss.
• How to track your share portfolio in Australia: The records to keep, a spreadsheet or a tracker, and the figures worth watching.
• All guides, and help with using Portfoli.au.
• Capital gains calculator: work out the gain on one sale, free.
• Dividend calculator: estimate dividend income with franking credits, free.