New Zealand has recently extended its tax regulations on cryptocurrency.
Similarly, many nations have been extending their tax regulations on digital assets. This has been necessary to compensate the dramatic downturn of global capital centres in the wake of the COVID-19 pandemic.
Taxation of Cryptocurrency
New Zealand citizens must now pay tax on transactions and sales made using extra-territorial crypto exchanges, Bloomberg Tax reported. However, lawmakers in New Zealand believe there was no need to extend tax regulations on digital assets. They think the existing rules are comprehensive enough.
New Zealand’s Inland Revenue Department, said the new rules are more of a guidance to crypto traders to calculate their income tax.
The new regulations added cryptocurrency to the list of taxable properties. China has similarly passed a law considering cryptocurrency as property and thus subject to the normal rules of Property Law.Tony Morris, Inland Revenue Department spokesperson
New Zealand Legislators Oppose
Earlier in 2020, Coindesk reported that New Zealand legislators were planning on dropping unfavourable tax regimes for cryptocurrency, in a bid to stimulate cryptocurrency transactions and make them less bureaucratised. The planned changes would see cryptocurrency be taxed under the same rules as normal investment portfolios are in the country. It seems that the country’s legislators have since changed the rules to become a more comprehensive guide on how cryptocurrency and tax regulations would interact.