Cryptocurrencies: IRD Tax Treatment; Fraud Warnings

Tax Treatment of Cryptocurrency

IRD is till working out the tax treatment of cryptocurrency. But it has made up its mind on some things. You can read all about it here. The main points so far are:

• 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.

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Cryptocurrency Fraud Warnings

NZ Police in association with City of London Police have just released a warning. See below for the PDF.

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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nifb_alert_-_fraudulent_cryptocurrency_investments_and_fake_endorsements.pdf
File Size:	476 kb
File Type:	pdf

Download File

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Our advice:

1. Don't assume it is authentic just because it looks good
2. Don't rush into any investment, including cryptocurrency
3. 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!