The New Zealand Inland Revenue Department announced on is weighing on easing the unfair tax burden cryptocurrencies are subjected to. The proposed changes might see the controversial goods and services tax (GST) applied to digital currencies dropped. Under New Zealand’s current administration, digital currencies are classed as properties and hence they are also subject to income tax.

Currently, in New Zealand, cryptocurrencies are liable to 15 percent taxation; when they change possession. On top of the GST, income tax is applied resulting in double taxation. The New Zealand Inland Revenue Revenue Department has described the situation as ‘unfavourable’. and proposed to drop the GST in several cases. However, the income tax will remain applicable.
<blockquote>“The current GST rules provide an uncertain and variable GST treatment, making using or investing in crypto-assets less attractive than using money or investing in other financial assets,” an IRD Policy issues paper<a href="http://taxpolicy.ird.govt.nz/publications/2020-ip-gst-issues/overview" target="_blank" rel="noopener"> published</a> on Feb. 24 read.</blockquote>
The paper claims that IRD’s aim is to make sure that digital assets; are treated in the same way as others in the asset classes; by exempting them from the GST liability.
<h2>Different Tokens to Receive Different Tax Treatment</h2>
On the other hand, the tax <a href="https://www.cryptoknowmics.com/crypto/eos-authority-fake-bot-scam-explodes-on-telegram/">authority</a> is evaluating the different types of tokens and the different types of taxation they should fall to. Well, this will have to depend on the purpose of the individual tokens. In particular, the tokens which act as a medium of exchange or currencies could likely be subjected to GST. The other types will most likely be subjected to sales tax.

In conclusion, all the changes suggested are very significant to the growth of the sector in the country. The IRD knows that changes are inevitable in order to promote growth. The IRD has invited the public to forward their opinion on the recommended changes before April 9th.

New Zealand’s Tax Authority Considers Altering its Treatment Towards Crypto

The New Zealand Inland Revenue department announced on is weighing on changing its treatment of digital currencies, that could see the.... %

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New Zealand’s Tax Authority Considers Altering its Treatment Towards Crypto

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