Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at New Zealand's attempts to crackdown on Crypto Investors avoiding tax.
New Zealand Crypto Tax
The New Zealand tax authority revealed that it is targeting individuals who are actively trading crypto but have not reported their income from these transactions in tax filings. The Inland Revenue Department (IRD) disclosed it has identified 227,000 crypto users in the country involved in about 7m transactions. This totalled around NZ $7.8b (USD $4.7b). The department has stated they consider cryptocurrency similar to any other property in terms of tax purposes. Any profits one makes by buying, selling, or trading crypto will therefore likely be taxed.
The heads-up from the IRD for potentially non-compliant crypto users in late 2020 has since been followed up by around round of warnings, according to IRD spokesperson Trevor Jeffries.
“Data we have has helped us identify customers who are not paying their tax. That data is also now being used to identify customers with significant cryptoassets. If people are making money from crypto they should be thinking about their tax obligations on this income and the risks of not declaring all related taxable activities.”
Jeffries also noted how the department offers resources to help people understand their crypto tax obligations, while he noted that the popular misconceptions about anonymity on the blockchain are false. He reiterated that the tax agency has the tools to track and analyse crypto activity, making tax evasion difficult.
With a surge in cryptocurrency use throughout New Zealand, a record number of people now owning crypto. A recent study shows this is partly due to distrust in traditional banks, while some investors see as barriers to achieving their financial goals. Over 1,000 respondents showed 14% admitting to owning crypto currently or in the past. This shows an increase from 10% reported in 2022.
Have a great day.
Peace. CryptoGod-1.
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