Inland Revenue has released guidelines that are intended to improve how ordinary tax rules apply to cryptoassets (also known as cryptocurrencies or virtual currencies).
This is so people can better understand just what their tax obligations are with cryptoassets, says New Zealand’s premier accounting professionals Tauranga-based Tutbury & Associates.
Currently in New Zealand there are no special tax rules for cryptoassets. “The guidelines explain how ordinary income tax rules apply to crypto-assets to help people understand their tax obligations,” says Kelly Tutbury, Accountant and Managing Director at Tutbury & Associates Limited.
What people gain from selling, trading or exchanging cryptoassets is taxable. Cryptoassets are treated as a form of property for tax purposes.
This updated guidance helps Kiwis to work out what tax they need to pay when they sell, trade, swap, lend or mine cryptoasset transactions. You can find out what records to keep as well as figuring out what they need to put in their tax return
With the updated guide comes the great opportunity for people to “go over and review their tax positions they have taken previously and make volunteer disclosures if their income from cryptoassets hasn’t been returned properly,” advises Kelly.
You need to maintain an accurate record of all your crypto asset transactions for at least seven years even if you no longer have any cryptoassets. Records should include the following information:
- The type of cryptoasset
- Date of the transaction
- Type of transaction (for example, received or disposed of)
- Number of units
- Value of the transaction in New Zealand dollars
- Total units of each cryptoasset held at the beginning and end of the year
- Exchange records and bank statements
- Wallet addresses.
“Cryptoasset exchanges may only keep records for a short period of time so you should download your transaction history regularly to keep you records accurate and up to date,” advises Kelly.
About Tutbury & Associates Limited:
Tutbury & Associates Limited has worked hard to build their reputation for excellent customer service by working interactively with their clients and making sure that their clients get value for money. They are ideal for tradespeople, or anyone who wants to grow their business.
Contact Tutbury & Associates Limited:
Phone: 07 576 2194
Address: 23 Myres Street Tauranga