IRD Collecting Data From Crypto Exchanges
The Inland Revenue Department is collecting investor data from Crypto Exchanges. It has requested exchanges such as Easy Crypto to provide data such as customers personal details and the type and value of their digital currency holdings. According to the IRD they want to get a better understanding of the crypto asset environment in New Zealand. This would in turn assist them in working out how to best help taxpayers meet their income tax obligations.
It seems that this move by IRD is part of an OECD and G20 initiative. OECD recently issued a report prepared and endorsed by the 137 members of the OECD/G20 Inclusive Framework on BEPS. This report looked at the tax treatments and tax policy issues of taxing virtual currencies. It also looked at the key concepts and of blockchain and crypto assets, looking at the characterization, legality and valuation of virtual currencies.
IRD comes knocking
The IRD is currently in the early stages of gathering this information. However, this would be a clear sign to crypto investors to meet their tax obligations, correctly declaring their crypto assets in their tax returns or doing a voluntary disclosure. This would save investors and crypto traders a lot of trouble down the line.
Accounting for Crypto assets
The Inland Revenue Department has recently released (perhaps in preparation of the above action) new guidelines on how ordinary tax rules apply to crypto assets. These guidelines make it clear that crypto assets are treated as a form of property for tax purposes. They also go into detail to explain your tax obligations when buying, selling or mining crypto assets.
If you are or have been investing in crypto currencies and are not sure of your tax obligations, give us a call today for a confidential, no obligation chat.