Cryptocurrencies, Like Gold, Are Taxable Property, New Zealand’s Tax Authority Says

  • Crypto assets are not real currencies, but they are taxable property - like the gold bullion, the New Zealand Inland Revenue Department (IRD) has stated.
  • Failure to report capital gains on crypto transactions is considered tax evasion by the IRD.

New Zealand’s Inland Revenue Department (IRD) has drawn comparisons between the gold bullion and cryptocurrencies. The IRD has stated that the process of buying and selling of both assets is similar in terms of tax collection purposes.

According to New Zealand’s tax authority, cryptocurrencies are not like fiat and “for tax purposes, cryptocurrency is property, not currency.” IRD’s stated reason for classifying cryptos as taxable property is because with digital assets, “foreign currency gains or loss provisions do not apply.”

Clear Guidelines On Crypto Taxes

The US Internal Revenue Service (IRS) has also classified cryptocurrencies as property, and both the IRD and the IRS have provided comprehensive guidelines on how to file taxes for crypto-related transactions.

Similar to capital gains on other asset classes, the IRD requires that the proceeds or profits generated from digital currency trading be reported as taxable income. Moreover, merchants who are paid in cryptocurrency for their products or services must include such transactions in their tax returns.

Accordign to the IRD, crypto assets are like gold because they:

generally don’t produce an income stream or provide any benefits, except when they’re sold or exchanged. This strongly suggests that cryptocurrencies are generally acquired with the purpose to sell or exchange them.

Diversified Long-Term Investments

However, the IRD acknowledges that some investors may acquire cryptocurrencies without the intention of selling or disposing them for capital gains. These people might be investing in crypto assets in the same way that many investors acquire gold bullion - to hold it and to diversify their long-term investment portfolio. So, if an investor is able to show that they will not realize an asset they’ve acquired, then the IRD might not consider such investments as taxable.

Furthermore, the IRD notes that it’s the investor’s responsibility to accurately file tax returns by documenting all taxable income, including that from cryptocurrency transactions. The tax authority also warns that not reporting crypto or any other type of transaction in the hope that it will go unnoticed is considered tax evasion.

Notably, New Zealand’s authorities began carefully addressing tax-related questions about digital assets when some of its citizens started receiving their salaries in cryptocurrency. The IRD felt that workers being paid in crypto could negatively affect tax revenue in a manner similar to the sale of digital services via the internet, because it can be difficult to collect a Goods and Services Tax (GST) on goods purchased through online retailers.

A more serious problem that the IRD and IRS are having to address is the increasingly global nature of many financial transactions, including cryptocurrency remittances which have the potential to make cross-border payments more difficult to track.


Hackers Threatening to Release 'Dirty Laundry' of Celebrities If Ransom Not Paid

Michael LaVere

Hackers have doubled their original ransom demand in exchange for the data belonging to U.S. entertainment law firm Grubman Shire Meiselas & Sacks, which represents many celebrities, such as Lady Gaga, Lizzo, and Madonna.

According to a report by Fox News, the hacking group REvil updated their ransom demand to $42 million in exchange for the stolen files containing personal information on high-profile celebrities such as Lady Gaga, U2 and President Donald Trump. The files belonged to attorney Allen Grubman.

The hackers claim to have stolen 756GB of data that includes the firm's contracts, personal emails, and correspondence with clients.

The hackers also deleted or encrypted the firm’s backup files and are demanding a ransom for the decryption key.

Grubman has refused to negotiate with the hacking group. The report cites an anonymous source close to the matter saying, 

“His view is, if he paid, the hackers might release the documents anyway. Plus the FBI has stated this hack is considered an act of international terrorism, and we don’t negotiate with terrorists.”

The hacking group released a statement on Thursday threatening to release to the “dirty laundry” of President Donald Trump if the ransom was not paid. 

Well, acording to a report published in Mail Online on Sunday (May 17), the hackers have "released a trove of emails mentioning President Donald Trump, and claim that they will publish much more damaging material if they aren't paid a ransom of $42 million."

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