New Zealand Issues the Tax Guidelines For Companies that Pays Employees in Cryptocurrencies
New Zealand has become the latest country to issue tax guidelines for companies that are paying employees in cryptocurrencies. Read Story on Adrypto
New Zealand has become the latest country to issue tax guidelines for companies that are paying employees in cryptocurrencies, in a move that brings the oft-maligned asset class in line with mainstream forms of payment.* Cryptocurrencies are largely unregulated, digital currencies that enable users to send money online without being tracked.
Following in the footsteps of the US, UK and Australian governments which have all provided similar advice, New Zealand’s introduction of tax rules stems from the increasing use of cryptocurrency assets.
“We have responded to queries from taxpayers on the tax treatment of payments in cryptocurrencies,” said a spokesman for Wellington’s Inland Revenue. The ruling by New Zealand’s tax authority applies to salaries and wages paid in cryptocurrencies such as bitcoin from September 1, as long as the payments are in regular, fixed amounts.
The digital currency of choice must also be pegged to at least one regular currency and must be able to be converted directly into a standard form of payment. The ruling, which was outlined by New Zealand’s Inland Revenue in a bulletin dated August 7, excludes self-employed taxpayers from earning incomes in cryptocurrencies.
Companies that choose to pay their employees in crypto will be able to deduct tax under New Zealand’s pay as you earn income tax scheme.
* An earlier version of this story incorrectly stated that New Zealand had become the first country to legalise salaries paid in cryptocurrency