Home > Updates > Crypto Crackdown: IRD zeroes in on 227,000 undeclared users
Inland Revenue (IR) has released a bulletin signalling that they are increasingly scrutinising undeclared cryptoasset income.
Cryptoassets are treated as a form of property for tax purposes, and generate taxable income when they are sold, traded, or exchanged. In this respect, the tax treatment differs from shareholdings in New Zealand companies (where the shares are held for long term capital growth and taxable dividend income).
In 2020, IR updated its tax guidance and has now begun contacting ‘high-risk’ individuals to address non-compliance. IR’s data analytics tools have identified 227,000 unique crypto-asset users in New Zealand, with transactions totalling $7.8 billion.
IR emphasizes in their bulletin the importance of declaring cryptoasset income, and has confirmed they will continue to use the tools at their disposal to ensure increased compliance.
Taxpayers with undeclared income from cryptocurrency transactions are urged in the bulletin to review their activities and take steps to meet outstanding tax obligations in order to avoid penalties and audits.
If you require any assistance or wish to further discuss the tax treatment of your cryptocurrency holdings, please reach out to one of our trusted Nexia Advisors.
Nexia is one of New Zealand’s best accounting and business advisory consultancy firms offering the full range of accounting, advisory, audit, tax and insolvency services. Nexia New Zealand has offices on Victoria Street in the Christchurch CBD, Albany and Newmarket in Auckland, and Hastings in the Hawke’s Bay.
