Tax authorities in New Zealand have seemingly received the approval to start collecting information related to traders from cryptocurrency exchanges. The office wants to ensure that the traders are paying accurate taxes on their transactions.
Tax agency starts data collection
The New Zealand Inland Revenue Department (IRD) announced on Monday that it has asked fall firms to provide it the personal details of customers. This is the first time in the history of IRD that it would gain access to data of cryptocurrency traders. The information to be supplied to the users includes names, addresses, trades, and the type and value of their crypto assets.
In a statement, the IRD noted,
“IRD is requesting this information to enhance our understanding of the cryptoasset environment in New Zealand so we can work out how best to help taxpayers meet their income tax obligations.”
Crypto industry disappointed
Easy Crypto chief executive Janine Grainger talked to Radio New Zealand and said that she was disappointed with the IRD’s request. However, she noted that there is no legal ground on which they could refuse the order. However, she called the process of handing over customer information as “heartbreaking.”
She added that the IRD is widening its tax base and crypto assets are gaining more popularity in the country. She also said that privacy is one of the fundamental ideas of cryptocurrency as it provides autonomy and freedom to the users.
New Zealand doesn’t have specific rules to define the tax treatment of cryptocurrencies. However, the IRD considered cryptocurrencies as a form of property, not money. This means that crypto investors are liable to pay corporation tax, income tax, capital gains tax, etc. depending on the activities and types of transactions they do.
Australian Taxation Office also requires crypto users to report their transactions for tax compliance. They were warned of strict penalties if they failed to report their income or pay taxes on crypto holdings. The ATO previously said that at least 350,000 individuals should expect to receive letters to remind them of their tax obligations.