Inland Revenue has updated its guidance on the tax treatment of cryptoassets in New Zealand.
Crypto-assets are also known as cryptocurrencies or virtual currencies.
Spokesperson Tony Morris says Inland Revenue is doing the refresh to provide some certainty for taxpayers with cryptoassets.
“People can buy, sell, and exchange cryptoassets; provide goods or services in exchange for them; mine cryptoassets; and earn staking rewards (or “crypto interest”) among other things,” Tony Morris says.
“There are no special tax rules for cryptoassets in New Zealand. The guidance clarifies how ordinary income tax rules apply to cryptoassets to help people understand their tax obligations.
“Essentially, cryptoassets are treated as a form of property for tax purposes. What people make from selling, trading or exchanging crypto-assets is taxable.
“This updated guidance allows people to work out what tax they need to pay when they sell, trade, swap, lend or mine cryptoasset transactions. They can find out what records to keep and work out what they need to put in their tax return.”
Tony Morris says taxpayers can also find out when they are in a business, and how tax applies to them when they are.
“The guideline is part of IR’s focus on helping people to get things ‘right from the start’ and get their returns filed correctly. It’s also a good opportunity for people to review the tax positions they have taken previously and make voluntary disclosures if their income from cryptoassets hasn’t been returned correctly.
“There are details on how to work out cryptoasset income and expenses; how to calculate the New Zealand dollar value of crypto-assets and information on the accurate and complete records that need to be kept. As the industry is constantly evolving, Inland Revenue will continue to consider other cryptoasset-related tax issues as they emerge.”
You can see the new guidance at https://www.ird.govt.nz/cryptoassets
From the IRD News website | © Copyright 2020 Inland Revenue.