New Zealand IRD (Inland Revenue Department) has made a move on the cryptocurrency traders and businesses by reminding them to pay their taxes on cryptocurrency which is considered property and be aware of the consequence of evading taxes.
New Zealand IRD reminds of cryptocurrency tax obligation or face consequences
According to the General Manager of New Zealand Financial Innovation and Technology Association (FintechNZ), James Brown New Zealand is becoming a global blockchain centre through its active embracement of cryptocurrencies and blockchain.
However, the New Zealand government is not avoiding the chance to collect revenue from this lucrative sector as Inland Revenue (IRD) is clamping down on traders and businesses that use cryptocurrencies. IRD is reminding the crypto users of their tax obligations and the consequences of avoiding them.
Tony Morris, the leader of New Zealand IRD customer segment said the organization is working towards eliminating the bad actors that abuse the system:
“People who may be non-compliant … are something we’re looking at, and how we can improve the information we get and work closely with international authorities to work out how we can best do that.”
Now, Inland Revenue has taken the digital currencies under the same wing as properties for the taxation purpose meaning traders have to pay taxes on cryptocurrency capital gains. IRD has issued a FAQ on its website for people regarding the tax status of cryptos.
The website provides a clear “for tax purposes, cryptocurrency is property, not currency.” If your business accepts crypto as a payment for good and services, it is considered business income and is taxable. According to the New Zealand’s business income taxation rule, it would be taxable in the range of 10.5 to 33 percent.
New Zealand favourable for crypto
Countries over the globe have established a legislation regarding taxes on cryptocurrencies or are already undergoing the process. Morris further states that:
“Tax rules are quite old. Things like cryptocurrency are quite new so it’s not always an obvious answer. It’s still early days on the policy and legislative front … we’re looking at the whole policy settings around this and other things, so too early to say whether we would – but we’re certainly looking at what might be needed going forward.”
Though FintechNZ leader Brown notifies that regulations to blockchain and cryptos are friendly, the government is not losing the opportunity to use them for their own gains.
By treating cryptos as property for income tax and reminding its citizens of the consequences of evading crypto taxation New Zealand has joined the likes of countries like the US.
Well, countries worldwide are getting firm on cryptocurrency regulations and taking their tax filing and evasion very strictly.
Do you think New Zealand’s favour is majorly for blockchain and crypto support is only to an extent? Which other country do you think will be next to go all up on crypto taxation now? Let me know your views down below!