Tax Treatment of Cryptocurrency
- For tax purposes, cryptocurrency is property, not currency. This means foreign currency gain or loss provisions do not apply.
- Cryptocurrency received as payment for goods or services is business income, which is taxable. This is seen as a barter transaction and you’ll need to calculate the value of the cryptocurrency in NZD at the time it’s received.
- Cryptocurrency is considered property for income tax purposes. So that means that the proceeds you make from selling it are very probably taxable.
Cryptocurrency Fraud Warnings
Apparently, fraudulent websites alleging to offer cryptocurrency investments are dishonestly using the image of Martin Lewis, the founder and editor for moneysavingexpert.com, as an endorsement for their companies. However, Martin doesn't do adverts. See his blog post for more info here. These sites are also falsely stating that Dragons Den back their schemes.
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- Don't assume it is authentic just because it looks good
- Don't rush into any investment, including cryptocurrency
- Consult a financial advisor
More info is available at NetSafe, especially re scams. And, just for the record, we don't claim any endorsement by Martin Lewis, his website, NZ Police, City of London Police or NetSafe. Any copyrights belong to their legal owners. We are merely making you aware of what is going on out there. Keep safe!