New Zealand Rules Receiving Income in Bitcoin Is Legal, Taxable
Marie Huillet's original article for cointelegraph.com reduced by 70%
New Zealand's tax authorities have ruled that income in cryptocurrencies is legal and provided guidance on how exactly it should be taxed. In a tax information bulletin published on July 4, the New Zealand Inland Revenue Department summarized the provisions of the public ruling, made under s 91D of the country's Tax Administration Act 1994.Crypto used must be "Money-like" to be taxed. Specifically, the guidance on the income tax treatment of crypto assets applies to payments in crypto that form part of the employees' regular salary and are fixed at a predetermined amount or rate - rather than, for example, payments that form part of an employee share scheme.
"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. "Money-like" crypto assets are further defined as those that provide a general peer-to-peer payment system, rather than assets that function in a similar way to vouchers, shares, or debt securities. As reported, tax authorities and lawmakers globally are increasingly turning their attention to cryptocurrencies - both clarifying which provisions they fall under and attempting to tighten their grip on evasion.
Last week, crypto industry sources claimed that the United Kingdom's tax authority was allegedly requesting that digital currency exchanges provide it with information about customers' names and transactions aiming to identify cases of tax evasion.
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