If it’s a taxable event, authorities want to know.
New Zealand businesses must now submit information on their clients’ digit asset usage to the country’s tax regulator, the Inland Revenue Department, or IRD.
The governing body said it wants to get a better grasp on the crypto scene in the country and determine an applicable tax framework for the asset class, according to a statement reported by Radio New Zealand, or RNZ. In addition to specifics around crypto usage, the IRD will also request associated client information, RNZ wrote.
The IRD is not the only government body dialing in on digital asset taxation. The IRS, the U.S.’ tax authority, has also upped its overwatch on the crypto industry, requiring filing citizens check a box noting any interaction with the asset class. In 2018, Coinbase also had to give the IRS data on thousands of its customers as a result of an investigation by the agency.
Janine Grainger, co-founder of New Zealand-based crypto exchange Easy Crypto, expressed displeasure with the IRD’s move, noting the industry’s focus on privacy. Even so, she agreed to follow the agency’s demand, bound by legal requirement, according to her comments to RNZ.
“While many people might think ‘I have nothing to hide therefore, what do I care?’ the point of privacy isn’t to aid people who have something to hide, it’s to ensure we have a fair, open, and free society,” she told the media outlet.
In the fall of 2019, the IRS provided additional clarity on crypto taxation, although the clarity further hinted at the agency’s lack of understanding of the asset class.