The tax authorities of New Zealand make cryptocurrency payments in term of salaries legal
across the country. So far, this is massive news for the cryptocurrency experts and enthusiasts
across the country. On the other hand, the new rule from New Zealand’s tax authority sends a
message to the state that is not adopting cryptocurrency.
Cointelegraph said that the tax authorities in the country said that the companies could pay
their employees in cryptocurrency. In addition to this, the tax authorities also provide a
guidance system considering the tax treatment such as remuneration. After a prolonged and
internal debate concerning to pay the salaries only in fiat cryptocurrency, finally comes to an
The Department of Inland Revenue of New Zealand did summarize distinctive provisions
considering the public ruling. Moreover, this comes into being right in terms of the Act 91D
Tax Administration of 1994. Furthermore, the report came into being on the 7th of August
2019 in a credible bulletin considering the tax information. The act is having a
straightforward relationship with section RD 3.
What are the other things that the documentation has in store?
The documents also point out a lot of things and ways as to how salary in the form
cryptocurrency can be done. According to the reports, the ruling also does apply to a specific
scenario where the payments for crypto-asset will take place for the services under the
employment agreement. It would include commission, bonus, overtime pay, and any other
kind of cash. Moreover, the fees are going to stay fixed in a singular amount. On the other
hand, it forms a definitive part of the remuneration of the employees.
The ruling also applies to the people when it comes to salary as well as wage earners. The
self-employed taxpayers cannot avail to get wages in terms of cryptocurrency. Additionally,
the cryptocurrency assets which usually does get paid are into a lock-up period. Moreover,
there is an absolute need to convert the cryptocurrency into the conventional liquidity, fiat
currency.At the end of it, the document also adds quite a definitive purpose considering the
cryptocurrency asset. In the long run, it would help the cryptocurrency asset to perform likethe conventional fiat currency. Cryptocurrency value asset also needs to be equal to one or
more fiat currencies.
Conventional payments system need time to be accepted as a cryptocurrency payment
The document also suggests that the cryptocurrency payment must be equal or similar to the
present-day notion of wages and salaries. The moment cryptocurrency performs like
conventional assets and payroll, it can also become a perfect replacement for fiat currency.
In the present-day scenario, the cryptocurrency assets are not said to the perfect replacement
of cryptocurrency. Moreover, the commissioner’s perspective considering cryptocurrency
assets is that it converting cryptocurrency to fiat currency is tough. The cryptocurrencies are
not precisely similar to money. Hence, they cannot be deemed as wages and salaries.
Most of the authorities around the world are seeking the cryptocurrency exchanges to share
the transaction history. By doing this, it will be extremely convenient to know how much tax
do people need to pay while exchanging money.