New Zealand Regards Cryptocurrency Salaries As Legal

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New Zealand Regards Cryptocurrency Salaries As Legal

New Zealand officially declared income in cryptocurrencies as legal. The country introduced a formula on how to tax this income as well.

Salaries for employees

More specifically, the guide on cryptocurrency income taxation refers to the part of your regular salary that is covered with bitcoin and that is predetermined. It is, therefore, a different way than in the case of division of shares into employees. Moreover, the new rules only apply to employees on a contract with the employer, they do not apply to self-employment. New Zealand clearly declares that cryptocurrencies paid to employees must be directly convertible for fiat currencies:
In the current environment where crypto-assets are not readily accepted as payment for goods and services, the Commissioner’s view is that crypto-assets that cannot be converted directly into fiat currency on an exchange [...] are not sufficiently “money-like” to be considered salary or wages
In order for the salary to be taxable, the assets must function as normal currency or must involve fiduciary currencies (e.g. stablecoins).

Work on taxes on cryptocurrencies

Tax authorities and lawmakers around the world pay more and more attention to cryptocurrencies. Everyone definitely declares which direction the law should go in, but first and foremost everyone rakes their brains how to fight against people who evade paying taxes. A week ago, the cryptocurrency industry hit a high-profile case of this sort. UK offices requested cryptocurrency exchanges for clients who are reluctant to pay taxes.

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