Cryptocurrency and tax
Over the last decade, the use of digital or virtual currencies, known as “cryptocurrencies”, has grown dramatically in popularity. A single piece of Bitcoin is currently valued at over $9,000 NZD. Some New Zealand retailers have already begun accepting Bitcoin as a form of payment, which has led to the Inland Revenue releasing a ‘Questions & answers’ considering the tax treatment of cryptocurrency.
For tax purposes, cryptocurrency is treated as property, which means that foreign currency gain or loss provisions do not apply. However, if a New Zealand business accepts cryptocurrency as a form of payment, the amount is treated as taxable business income based on the value of the cryptocurrency at the time it is received.
Any gain on sale of cryptocurrency is assessed by considering the original purpose for acquiring the currency. If the currency was acquired with the purpose of disposal, any proceeds made from selling the currency are taxable. IRD consider the nature of cryptocurrency means it is unlikely that a person would acquire it without the intention to sell or exchange it, meaning the majority of gains made on disposals would give rise to a tax liability.
If you invest or trade in cryptocurrencies, be sure to keep an eye out for further developments from Inland Revenue, as they intend to refine its tax treatment as more information becomes available.
New Zealand recently finished its most successful Commonwealth Games since 1990, generating some interesting statistics. It was our most successful games hosted outside of New Zealand, winning 46 medals, 15 of which were gold. This was enough to see us finish 5th on the medal table, punching well above our weight. We sent our largest Commonwealth Games team ever to the Gold Coast, comprising 251 athletes competing across 18 sports. The Commonwealth consists of 53 countries, of which New Zealand is the 23rd largest based on population, thus finishing 5th on the medal table was an awesome effort.
Many people would agree that based on our size, we are one of the most successful sporting countries in the world. Statistics New Zealand announced that we finished 9th for gold medals and 14th for total medals per capita, beating Australia who finished 17th.
With 79.2% of Kiwis participating in some form of sport each week coupled with our countries competitive sporting culture, it is not surprising we perform well in global competitions. Following our athletes’ success on the Gold Coast, there is now talk of New Zealand hosting a future Commonwealth Games.