New Zealand’s Tax Office, the Inland Revenue Department (IRD), has just announced that it is now legal to receive salaries paid in Cryptocurrencies, and they will be taxed accordingly.
The new law was passed on June 27 2019 and will be in effect, at this stage, for three years from September 1st 2019.
The new law falls under the Tax Administration Act 1994 (section RD 3), with the IRD publishing in their August Bulletin that an employee can be paid salaries in crypto assets as long as the payments are for services performed under an employment contract, are for a fixed amount and form a regular part of the employees remuneration.
It is also necessary, as per IRD requirements, that the crypto asset being paid must be able to be exchanged for fiat currency, and they must have the primary purpose of acting like a currency or be pegged to the price of one or more 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 regards to the tax side, salaries, which are paid in crypto, will be treated as PAYE (pay as you earn) income payments.