New Zealand Takes Strong Measures Against Crypto Investors Evading Tax Disclosures
By Shalini Nagarajan
Updated:
July 4, 2024, 00:27 EDT
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1 min read
New Zealand’s tax authorities announced on Thursday their intensified focus on individuals engaged in active crypto trading who have neglected to declare their income from these activities in tax filings. The Inland Revenue Department (IRD) disclosed that it has identified 227,000 crypto users across the country involved in approximately 7 million transactions, amounting to NZ $7.8 billion (USD $4.7 billion).
Since 2018, the department has treated cryptocurrency similarly to other forms of property for tax purposes. This means that any profits derived from buying, selling, or trading crypto are subject to taxation.
Understanding Your Crypto Tax Responsibilities, Warns NZ IRD
Following initial alerts to potentially non-compliant crypto users in late 2020, the tax department has issued another round of warnings, according to IRD spokesperson Trevor Jeffries.
“The data at our disposal has enabled us to identify customers who are not fulfilling their tax obligations,” he stated. “This data is also now being utilized to pinpoint customers with substantial crypto assets.
“If individuals are profiting from crypto investments, they must consider their tax liabilities on these earnings and the consequences of failing to disclose all relevant taxable activities.”
Jeffries further emphasized that the department provides resources to assist individuals in comprehending their crypto tax obligations. Moreover, he debunked the misconception surrounding anonymity on the blockchain, asserting that the tax agency possesses the necessary tools to monitor and analyze crypto activities, thereby making tax evasion challenging.
Survey Highlights Increasing Interest in Digital Assets in NZ
New Zealand is witnessing a surge in cryptocurrency adoption, with a growing number of individuals now holding crypto assets. A recent survey indicated that this trend is partly driven by skepticism toward traditional banks and financial institutions, which some investors perceive as obstacles to their financial aspirations.
The survey, which polled over 1,000 respondents, revealed that 14% currently own or have owned crypto, marking an increase from 10% reported in 2022. Furthermore, nearly half (45%) of those surveyed expressed interest in future crypto investments.
In April, New Zealand’s Commerce Minister, Andrew Bayly, urged the government to enhance support for the crypto industry. He voiced concerns over the slow pace of crypto adoption and called for regulatory reforms aimed at fostering a more conducive environment for the sector’s expansion.
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