The New Zealand Revenue Department (IRD) has sent letters to more than 227,000 local traders urging them to declare their cryptocurrency income.
The IRS identified more than 227,000 unique users who made about 7 million transactions. The total amount of transactions is estimated at 7.8 billion New Zealand dollars (about $4.77 billion). In its message to traders, the IRD reminded that virtual assets are subject to tax, and if traders refuse to disclose their income in digital assets, the agency will take stricter action.
In 2020, New Zealand updated its guidelines for digital assets to consider them a form of property. This means that earnings from trading crypto assets are subject to tax. IRD spokesman Trevor Jeffries suggested that investors should have funds to pay taxes as the crypto market has grown significantly this year.
“The value of crypto assets has reached new heights, so now is a good time to seriously think about taxes on your activities. Investors should be aware of tax obligations and consider the risks associated with non-payment. Despite the popular belief that people are invisible on the blockchain, we have the tools to detect crypto asset activity,” Jeffries said.
To collect information, the department cooperates with exchanges within the country and abroad. The IRD is also working with other tax authorities to obtain more data on cryptocurrency transactions carried out by traders outside New Zealand.
According to a recent study by crypto exchange Easy Crypto, 14% of New Zealanders currently own or have owned cryptocurrencies, and 58% of New Zealanders plan to buy crypto assets.
