tl;dr
New Zealand's tax authorities have identified over 200,000 citizens who have not declared their cryptocurrency income in their tax returns. The Inland Revenue Department (IRD) is focusing on taxpayers actively dealing with cryptocurrencies but not disclosing their earnings. Cryptocurrencies have bee...
New Zealand's tax authorities have identified over 200,000 citizens who have not declared their cryptocurrency income in their tax returns. The Inland Revenue Department (IRD) is focusing on taxpayers actively dealing with cryptocurrencies but not disclosing their earnings.
Cryptocurrencies have been treated as taxable property since 2020, and the tax authority has identified over 227,000 unique crypto users with over 7 million transactions, estimated to be worth around $4.77 billion. The IRD is stepping up compliance activities and collaborating with exchanges to collect information on customers' crypto assets and transactions.
New Zealand updated its guidelines on the treatment of digital assets in 2020, treating cryptocurrencies as a form of property for tax purposes, making earnings from trading these assets taxable. The updated rules state that digital assets and the income earned from their mining are taxable under certain circumstances.
The tax authority has identified over 227,000 unique crypto users in the country with over 7 million transactions, estimated to have a total value of NZD 7.8 billion, worth around $4.77 billion. The data has helped the tax authority to identify customers who have not paid their taxes accordingly and those with significant holdings.
Trevor Jeffries, a spokesperson for the IRD, emphasized the importance of declaring and paying taxes on cryptoasset profits, especially during a market growth period, stating, "Cryptoasset values have reached new highs, so now is a good time for people to think seriously about tax on their cryptoasset activity."
The IRD is "stepping up" its compliance activities for taxpayers owning digital assets, collaborating with exchanges inland and overseas to collect pertinent information, and working with other tax jurisdictions to receive more data on customers' crypto assets and transactions outside New Zealand.
New Zealand's crypto regulations are still undeveloped, prompting calls for a more proactive approach to regulating the sector. This has sparked discussions on the need for increased vigilance and a hands-on approach toward regulating digital assets and blockchain in the country.
In the market, Bitcoin (BTC) is currently trading at $57,486 in the weekly chart.