The Tax Service has identified more than 227,000 unique users who have completed about 7 million transactions. The total amount of transactions is estimated at 7.8 billion New Zealand dollars (about $4.77 billion). In its appeal to traders, IRD reminded that virtual assets are taxed, and if traders refuse to disclose their income in digital assets, the agency will take stricter measures.
In 2020, New Zealand updated its recommendations regarding digital assets — they began to be considered a form of ownership. This means that earnings from trading crypto assets are taxed. IRD official Trevor Jeffries suggested that investors should have funds to pay taxes, as the crypto market has grown significantly this year.
"The value of crypto assets has reached new heights, so now is a good time to seriously think about taxes on your activities. Investors should remember about tax obligations and take into account the risks associated with non-payment. Despite the widespread belief that people are invisible on the blockchain, we have tools to identify activities with crypto assets," Jeffries said.
To collect information, the agency cooperates with exchanges within the country and abroad. The IRD is also working with other tax authorities to obtain more data on cryptocurrency transactions made by traders outside New Zealand.
According to the results of a recent study conducted by the Easy Crypto crypto exchange, 14% of New Zealand citizens own cryptocurrencies now or have owned them in the past, and 58% of New Zealanders plan to buy crypto assets.