As cryptocurrency becomes more commonly used, official definitions are being released by various bodies as well as guidelines being created for crypto users to make sure that the use of crypto is regularized and in line with the laws of the land. At a time, cryptocurrency was not recognized by any official regulatory body and this left uses in limbo as to how to properly conduct business with crypto and also how to pay their taxes.
New Zealand is taking positive steps in this direction as it was announced on July 4, 2019 that the New Zealand Inland Revenue Department has declared that cryptocurrency is legal as a source of income and also gave guidance on how taxes should be paid for cryptocurrency with summary of the provisions of the public ruling made under the s 91D of the country’s tax administration act of 1994.
Details of New Development
The guidance was given on the treatment of cryptocurrency as income tax with regards to payments that form a part of an employee’s regular fixed salary rather than payments that form a part of the employee’s scheme. These payments must also be fixed at a predetermined amount or rate and only applies to salary and wage earners and not to self-employed individuals, covering both remunerations for services as well as bonuses, commissions, and gratuities.