New Zealand Tax Authority Cryptocurrency Revenue Legal

The tax authority of New Zealand announced that the receipt of income in cryptocurrencies is legal, and provided recommendations on the taxation of this type of income.

In the tax newsletter published
The New Zealand Tax Service summarized the provisions of the public decision adopted in accordance with the Tax Administration Act.

In particular, the manual on the income tax regime for crypto assets applies to payments in cryptocurrencies, which form part of the regular salary of employees and are fixed at a predetermined amount or rate, and not, for example, to payments that make up only part of the salary of an employee.

In addition, it applies only to employees, and not to self-employed taxpayers, and covers both remuneration for services and bonuses, commissions and gratuities. In order for salaries in crypto assets to be taxed, the crypto asset paid to employees should not be subject to blocking and should be directly converted into fiat currency. The document says:

“In the current conditions, when crypto assets are not always accepted as payment for goods and services, the commissioner believes that crypto assets that cannot be converted directly into fiat currency on the exchange, […] cannot be considered cash suitable for paying salaries. ”

Crypto-assets similar to money are further defined as providing a common P2P payment system, rather than assets that function similarly to vouchers, stocks or debt securities. Thus, in order for wages in a cryptocurrency to be taxed, the crypto asset must function as a currency or otherwise be tied to one (or several) fiat currencies.

The issue of taxation of cryptocurrencies is now dealt with by most large countries. Brazil’s tax service obliges
From August 1, citizens must report cryptocurrency transactions, and the UK Tax Service has demanded
from exchanges to provide customer information.