IRD offers guidance on cryptoassets
Inland Revenue is providing tax guidance for investors who earn money from cryptoassets.
Wednesday, September 9th 2020, 6:00AM
Spokesman Tony Morris said it was designed to provide certainty for taxpayers with cryptoassets.
“People can buy, sell, and exchange cryptoassets; provide goods or services in exchange for them; mine cryptoassets; and earn staking rewards, among other things,” he said.
“There are no special tax rules for cryptoassets in New Zealand. The guidance clarifies how ordinary income tax rules apply to cryptoassets to help people understand their tax obligations.
“Essentially, cryptoassets are treated as a form of property for tax purposes. What people make from selling, trading or exchanging crypto-assets is taxable.
“This updated guidance allows people to work out what tax they need to pay when they sell, trade, swap, lend or mine cryptoasset transactions. They can find out what records to keep and work out what they need to put in their tax return.”
Investors would need to calculate the New Zealand dollar value of their cryptoasset transactions, as well as their income and expenses, and include that in their tax returns.
That could include income from mining, staking, lending, selling or being paid in cryptocurrencies.
“If you hold cryptoassets as trading stock, your income also includes the closing value of your trading stock. This is the value of the cryptoassets you hold as trading stock at the end of the income year.”
Traders could generally claim the cost of the assets, the depreciation of capital assets such as computer hardware, and interest charged on money borrowed to buy assets if there is a taxable profit involved.
When investors could not determine the cost of cryptoassets that were not trading stock, they could use a “first in first out” or weighted average cost method.
| « Firms will need to 'consolidate and grow' | Mann on a mission to diversify financial advice » |
Special Offers
Comments from our readers
No comments yet
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
