12 Aug 2019
The New Zealand government has approved for employees to receive their salaries in cryptocurrencies. Despite being in a digital currency, the Inland Revenue Department (IRD), New Zealand’s tax office has stated that it would be still taxed accordingly.
The IRD’s latest tax information bulletin explained how the new rule is set to take effect from September 1st, 2019 and will be active for the next 3 years. The bulletin stated that several cryptocurrencies which follow the crypto and tax payment policies may be used for paying salaries. The digital currencies eligible were not listed but criteria and a list of conditions was given out. The salary must be given for the work done in line with the employment contract and must be for a fixed amount. It should be also be of the same value as the employee’s usual pay.
The publication stated ,’ In the current environment where crypto-assets are not readily accepted as payments for goods and services, the Commissioner’s view is that crypto-assets that cannot be converted directly into fiat currency on an exchange are not sufficiently “money-like” to be considered salary or wages.’
The cryptocurrency Bitcoin fits the conditions and criteria given by the tax authority. Previously, salaries could only be paid in the New Zealand dollar.