Crypto assets are treated as a form of property for tax purposes and are a recent area that the IRD are looking at. While there are different types of crypto assets, the tax treatment depends on the characteristics and use of the crypto assets. It does not depend on what they are called.

Crypto assets are not subject to GST when they are bought or sold but do have GST implications when they are received as payment for normal business activities.In most cases, the amounts you get from selling, trading, or exchanging crypto assets are taxable (this includes when you exchange one type of crypto asset for another).

You may have to pay tax because you are,

• acquiring crypto assets for the purposeof disposal (for example to sell or exchange)

• trading in crypto assets

• using crypto assets for a profit-making scheme.

It is important to look at whether your crypto asset activity falls into any of these categories, although IRD’s view is that most crypto trading pertains an element of disposal to achieve your goals.

You need to add any taxable income or loss from your crypto asset activity in your income tax return. Before you can put your crypto asset net income (or loss) in your tax return you need to:

• calculate the New Zealand dollar value of your crypto asset transactions

• work out your crypto asset income and expenses.

If you held crypto assets that were stolen, you may be able to claim a deduction for the loss depending on your intention for the assets. It is important to keep good records for all your transactions with crypto assets as you will need these to support the position taken in your income tax return. These records should include;

• the type of crypto asset

• date of the transaction

• type of transaction (for example, received ordisposed of)

• number of units

• value of the transaction in New Zealand dollars

• total units of each crypto asset held at the beginning and end of the year

• exchange records and bank statements

• wallet addresses.

If you have any crypto assets, please let us know when you bring your annual information in or let us know on the questionnaire so that we can discuss these.

This information was sourced, and copy-written from the IRD website which has a great deal more information if you want to take a look for yourself.