April

when

New Zealand has announced its plan to implement the Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD) by April 2026. This decision is part of the government’s initiative to increase the disclosure of information on cryptocurrencies and fight against cross-border tax avoidance.
The Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill presented by Minister of Revenue Simon Watts provides for the implementation of the OECD’s CARF. Adopted in 2022, this framework requires that all crypto-asset service providers obtain and submit comprehensive transaction information to tax authorities.&nbsp;
<h3 class="wp-block-heading" id="officials-target-tax-gaps-in-the-growing-crypto-market">Officials target tax gaps in the growing crypto market</h3>
From April 1, 2026, the crypto-asset service providers operating in New Zealand will have to obtain information on their customers’ transactions. According to the policy, all the data obtained must be submitted to Inland Revenue, New Zealand’s taxation authority, by 30th June 2027. This information will be reported to the concerned tax authorities across the world to help fight against cross-border tax fraud.&nbsp;
The New Zealand government has noted that the growth of crypto-assets has been fast, and this has posed a big challenge for the tax authority in tracking the income and investments made through such digital channels. The establishment of CARF is in a bid to solve this problem since profits made from crypto trading should be well-stated and taxed.&nbsp;
The framework also aims to equate the tax reporting conditions of traditional financial institutions and crypto-asset service providers. In this way, the government aims to reduce the probability of tax revenue losses and, thus, improve the equity of the tax system.&nbsp;
The new regulation will enforce severe consequences on crypto-asset service providers and users who do not adhere to the CARF guidelines. The penalties that can be imposed on the providers who fail to show “reasonable care” for their responsibilities will be between NZD$20,000-NZD$100,000 (about $12,000-$62,000).&nbsp;
Also, clients who fail to give their service providers the required information may be fined 1000 New Zealand dollars, approximately $621. These penalties show the government’s determination to implement the new rules and make sure that all the stakeholders in the crypto transactions follow the reporting standards.&nbsp;
<h3 class="wp-block-heading" id="legislation-builds-on-previous-efforts-to-regulate-digital-assets">Legislation builds on previous efforts to regulate digital assets</h3>
The introduction of this bill follows a series of moves by New Zealand’s tax authorities to address the challenges posed by cryptocurrencies. In July 2024, Inland Revenue <a href="https://www.ird.govt.nz/media-releases/2024/focus-on-cryptoassets" rel="noopener noreferrer nofollow" target="_blank">reported</a> that more than 200,000 taxpayers had not declared their income from cryptocurrencies. The proposed legislation is to address this problem and seeks to prevent future incidents of tax evasion through digital assets.&nbsp;
The current regulatory push began in 2020 when the tax authorities in New Zealand <a href="https://www.cryptopolitan.com/crypto-industry-in-new-zealand-legitimized/" rel="noopener noreferrer nofollow">started treating cryptocurrencies as taxable property.</a> If the bill is passed, Inland Revenue will be able to obtain more specific transaction data and, therefore, determine the taxes to be paid by users more efficiently.&nbsp;
New Zealand’s regulation of cryptocurrencies is similar to other countries’ measures, although the measures differ significantly. While some countries are increasing their measures to enhance tax collection, others are approaching the new asset class with caution because of its complexity.&nbsp;
For instance, South Korea recently <a href="https://www.hankyung.com/article/2024071426581" rel="noopener noreferrer nofollow" target="_blank">planned</a> to postpone the implementation of cryptocurrency taxation due to pressure from investors. On the other hand, Japan’s Blockchain Association has come up with proposals to ease the high cryptocurrency taxes in a bid to foster more engagement in the digital asset market.&nbsp;

New Zealand announces implementation plan for OECD crypto framework

Table of Contents

Cryptopolitan_News

Other articles published on Aug 28, 2024

Why Does Palestine Want to Join the BRICS Now?

Whales Suffer Losses in Bitcoin and Ethereum Transactions

Why Has Bitcoin and Cryptocurrencies Fallen Recently? Analytics Company Reveals the Top 5 Reasons

Bitcoin Price Falls to $58,000 After Latest Attempt

What’s Driving BlockDAG Toward its Predicted $1 Price? Insights on Near Protocol’s Bullish Moment...

Sony rolls out testnet for it’s Soneium blockchain

Join our free newsletter for daily crypto updates!