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Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

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Cryptocurrency - What are your tax obligations?

Written by Vanessa Williams on May 14th, 2018.      0 comments

In simplest terms, cryptocurrency is money that only exists digitally or virtually

Cryptocurrency uses cryptography and blockchain technology to regulate its generation and verify fund transfers.

bitcoin cryptocurrency-400There are no special tax rules for cryptocurrencies, ordinary tax rules apply.
 
Inland Revenue has recently released Cryptocurrency and Tax guidance about how the tax laws apply to the new technology. The guidance includes answers to some frequently asked questions to assist customers in understanding their tax obligations.  

For example, retailers have asked how to account for cryptocurrency receipts. If cryptocurrency is accepted as a method of payment for goods or services it is business income, which is taxable. This is seen as a barter transaction and you’ll need to calculate the value of the cryptocurrency in New Zealand Dollars at the time it is received.

For more information on cryptocurrency check out What is cryptocurrency.
If you believe that you haven’t got your tax right, you can make a voluntary disclosure to IRD to let us know on 09 520 9200.
 

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