Bitrabo Editorial
New Zealand’s Minister of Revenue, Simon Watts, presented a new bill to the House on August 26, 2024, which could have significant implications for the country’s cryptocurrency landscape.
Adoption of OECD Crypto Reporting Framework
The bill, named Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures), aims to implement the Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard (CARF) developed by the Organisation for Economic Co-Operation and Development (OECD).
These proposed changes are set to come into effect on April 1, 2026, requiring New Zealand-based reporting crypto-asset service providers (RCASPs) to comply with new regulatory standards. These entities must report user information to the country’s tax authority by July 30, 2027.
RCASPs are mandated to disclose users’ personal data and transaction details to ensure accurate taxation of profits, with this information being shared with relevant tax authorities globally by September 30, 2027.
The bill emphasizes the need for oversight in digital asset transactions and income generated from digital asset trading, particularly through large-scale intermediaries.
Consequences of Non-Compliance
The proposal outlines penalties for RCASPs failing to adhere to reporting requirements, with penalties of NZD 300 (USD 187) per violation, capped at NZD 10,000 (USD 6,231) annually. Users of trading platforms may also face fines up to NZD 1,000 (USD 621) for non-compliance.
Notably, RCASPs are exempt from penalties if circumstances are beyond their control. New Zealand’s tax authorities previously noted a significant number of individuals failing to report crypto income in 2024.
Since 2020, cryptocurrencies have been classified as taxable assets in New Zealand, and the bill could revolutionize the country’s cryptocurrency ecosystem by enabling tax authorities to access users’ transaction data for tax calculation purposes.
While some countries are enhancing cryptocurrency regulations for tax compliance, others are delaying such measures due to uncertainty surrounding this asset class.
For instance, South Korean lawmakers proposed postponing cryptocurrency taxation due to investor concerns, while in Japan, there are calls to reduce stringent crypto taxes to promote broader participation in the digital assets sector. The impact of varying regulatory approaches on digital asset ecosystems remains to be seen.