New Zealand Cracks Down on Crypto Investors Avoiding Tax Disclosures
New Zealand’s tax authority revealed on Thursday that it is targeting individuals actively trading crypto who 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, totaling NZ $7.8b (USD $4.7b).
Since 2018, the department considers cryptocurrency like any other property for tax purposes. This means any profits one makes by buying, selling, or trading crypto will likely be taxed.
After giving a heads-up to potentially non-compliant crypto users in late 2020, the tax department has now sent out another round of warnings, according to IRD spokesperson Trevor Jeffries.
“Data we have has helped us identify customers who are not paying their tax,” he said. “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 emphasized that the department offers resources to help people understand their crypto tax obligations. Additionally, he said that popular misconceptions about anonymity on the blockchain are false. The tax agency has the tools to track and analyze crypto activity, making tax evasion difficult.
New Zealand is experiencing a surge in cryptocurrency use, with a record number of people now owning crypto. A recent study suggests this is partly due to a distrust in traditional banks and institutions, which some investors see as barriers to achieving their financial goals.
The study of over 1,000 respondents showed 14% admitting to owning crypto currently or in the past.
Read more on cryptonews.com
