New Zealand is gearing up to launch new crypto regulatory laws, especially on taxation. On August 26, 2024, Simon Watts, New Zealand’s Minister of Revenue, submitted a proposal that implements the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework(CARF).
New Zealand’s Taxation Bill
The bill, called the “Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures),” includes proposals on implementing CARF, confirming annual income tax rates, introducing tax relief measures, and amending the Common Reporting Standard (CRS). With the implementation of the new bill, New Zealand intends to enhance the country’s tax system, restricting any unfair or complex rules in the framework.
How Will the Bill Impact Crypto?
As per the bill, the New Zealand government would fetch the details of individual traders’ crypto transactions. Reporting crypto-asset service providers (RCASPs) in New Zealand are required to collect information on reportable users starting from April 1, 2026. The crypto providers are also mandated to submit the details to Inland Revenue by June 30, 2027.
US Proposes Bitcoin Tax-Free Zone to Dominate Digital EconomyWith this initiative, the government could levy tax on traders who extract profit from crypto trading. However, the government agency asserted that the tax authority would not be able to view the total income of a crypto trader.
Non-Compliance and Penalty
The New Zealand government announced that the RCASPs failing to comply with the new measures will face fines of 300 New Zealand dollars (NZD), equivalent to $186 each time. The mentioned penalty will be capped at 10,000 NZD.
However, the government added that the RCASPs would not be fined if they failed to comply with the rules for acceptable reasons. The agency added that the service providers could be charged a fine of 20,000 to 100,000 NZD if they deliberately breach the reporting rules.
