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Regulatory Series on Cryptocurrencies: Kiwis Love For Bitcoin and Tax Regime
We know that the US tax authorities, Internal Revenue Service (IRS) have been striving with all ways they can with an intention of simplifying the process of filing tax returns. Tax liability is an obligation and mandatory which is a method of funding governments to deliver better services in the interest of the public.
The New Zealand Inland Revenue Department (IRD) has recently confirmed in a statement that cryptocurrency is to be treated as property for tax purposes. NZ is a country who has announced Bitcoin’s (BTC) legal status and recognized the prevalence of BTC in inland just as another form of exchange currency, hence, subject to taxation.
Kiwis are likely to enforce the Inland’s law from September 1st, 2019. New Zealand Inland Revenue Department has ruled that income and salary payments in cryptocurrencies are legal and s 91D of the Country’s Tax Administration Act 1994 provides guidance on how exactly it should be taxed.
The Kiwis sovereignty accepts cryptocurrency as a payment system by the employers for the purpose of salary. The salary payments in crypto including fixed amount, bonus, commission, and gratuities, etc should form tax consideration.
In conjunction with the salary part, another source that attracts tax assessment. The ruling conceptualizes that crypto-assets paid in the form of salary must not be subject to a lock-up period and must be directly convertible into a fiat currency.