Crypto income in New Zealand is now legal and taxable according to the tax authorities which ruled the new legislation since new guidance was provided on how they should be taxed as we are reading in today’s coming altcoin news.
In a tax information bulletin that was published on July 4, the New Zealand Inland Revenue Department, we can read the summarized provisions of the public ruling which was made under s91D of the country’s Tax Administration Act 1994. The new guidance on crypto income tax applies to payments in crypto that form a piece of an employee’s regular salary and is fixed at a predetermined amount rather than payments that form part of an employee share scheme. Also, it will apply to salaries and wage earners but not to the self-employed taxpayers covering both the services and bonuses and remuneration, commissions and gratuities. For a crypto salary to be taxable, the ruling determines that the crypto asset paid to the employees cannot be a subject to lock-up period and have to convertible into fiat:
“In the current environment where crypto-assets are not readily accepted as payment for goods and services, the Commissioner’s view is that crypto-assets that cannot be converted directly into fiat currency on an exchange […] are not sufficiently “money-like” to be considered salary or wages.”
Assets such as cryptocurrencies are further defined as assets that provide general peer-to-peer payment system rather than assets that operate in a similar way to vouchers, debt securities, and shares. For the wage to be taxable, the authorities deem that a significant purpose of the crypto asset in question has to be that it operates as a currency or is otherwise pegged to one or more fiat currencies. As explained in the latest cryptocurrency news, the tax authorities and lawmakers are focusing more on cryptocurrencies now clarifying which provisions will they fall under and attempting to tighten their bid on evasion.
Just last week, a crypto industry source claimed that the United Kingdom tax authority has started requesting digital currency exchanges to provide information about customers’ names, transaction details, transaction histories all in order to make sure that they prevent tax evasion.
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