This is for all the Publish0x New Zealanders out there!
In a monumental step for cryptocurrency mainstream adoption, the New Zealand tax office (Inland Revenue Department (IRD)) recently legalized the payment of salaries and bonuses in cryptocurrency assets. Specifically, the arrangement set forth under BR Pub 19/01 and the Income Tax Act enables the remuneration to an employee in crypto-assets in circumstances where the crypto-asset payments:
- Are for services performed by the employee under an employment agreement;
- Are for a fixed amount; and
- Form a regular part of the employee’s remuneration.
Do note that the above ruling is only applicable to wage and salary earners, and does not extend to self-employed taxpayers. Such payment of crypto-assets must also be able to be exchanged for fiat (USD, GBP, SGD) currencies, and pegged to the price of at least one fiat currency.
You might be wondering how New Zealanders will be able to determine whether crypto-assets are subject to pay-as-you-earn (PAYE) or pay fringe benefit (FBT) taxation. The Inland Revenue Department notes, “The first step is to consider whether the payment is subject to PAYE. This is because, to the extent that an employment-related benefit is taxable to an employee, it will not be a fringe benefit. Therefore, if the provision of crypto-assets to an employee falls within the PAYE rules, PAYE will apply even if the FBT rules would also otherwise apply.”
The ruling is set to go into effect as of September 1, 2019.
What are your thoughts on New Zealand not allowing self-employed taxpayers to benefit under this recent amendment? Also, what cryptos would you prefer to be paid for your employment contract? Would you worry about the fluctuation and volatility of the crypto market affecting your salary? We’re interested to hear everyone’s thoughts in the comments!
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-Obiter Cryptum
