NAVIGATING CRYPTO TAX IN NEW ZEALAND

Navigating Crypto Tax in New Zealand: Cryptocurrency has gone mainstream in New Zealand. Whether you’re trading Bitcoin, minting NFTs, or staking tokens, chances are you’ve wondered: Do I need to pay tax on this? The short answer is yes. The long answer? Well, let’s dive into it.

This guide breaks down how crypto is taxed in New Zealand, what the Inland Revenue Department (IRD) expects from you, and how to stay compliant while making the most of your digital assets.

 

Is Crypto Taxable in New Zealand?

Absolutely. The IRD treats cryptocurrency as property, not currency. That means any profits you make from buying, selling, trading, or earning crypto are generally subject to Income Tax.

Unlike some countries, New Zealand doesn’t have a separate Capital Gains Tax. Instead, gains from crypto are taxed as income—just like your salary or business profits.

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How the IRD Views Crypto Transactions

The IRD has made it clear: if you’re making money from crypto, they want a slice. Here’s how they break it down:

Taxable Events Include:

• Selling crypto for NZD or other fiat currencies
• Trading one crypto for another (yes, even swapping Bitcoin for Ethereum)
• Using crypto to buy goods or services
• Lending crypto (if you lose beneficial ownership or receive a token in return)

These are all considered disposals, and if you make a profit, it’s taxable.

Earning Crypto? That’s Income Too

Some crypto activities are taxed as income when you acquire the asset:

• Mining rewards
• Airdrops (especially if they’re regular or part of a business activity)
• Staking rewards
• Referral bonuses

If you’re earning crypto in any way, it’s likely taxable the moment it hits your wallet.

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What About Losses?

Good news: if you’ve made losses on your crypto investments, you can offset them against gains. This can reduce your overall tax bill. But you’ll need to keep solid records to prove it.

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Can the IRD Track Crypto?

Yes, and they’re getting better at it.

The IRD can request data from centralized exchanges, including customer details and transaction histories. If you’ve used platforms like Binance, Coinbase, or Swyftx, chances are the IRD already knows about your activity.

While non-custodial wallets (like MetaMask or Ledger) offer more privacy, they don’t make you invisible. If you’ve moved assets between wallets or exchanges, those transactions can still be traced.

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Crypto Tax Rates in New Zealand

Your crypto gains are taxed at your personal income tax rate. Here’s a quick look at the current brackets for the 2025–2026 tax year:

So if you’re making serious gains, expect a serious tax bill.

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How to Calculate Your Crypto Tax

This is where things get tricky. You’ll need to track:

• Every transaction (buy, sell, trade, earn)
• The value of each asset at the time of the transaction
• Your cost basis (what you paid for the asset)
• Any fees paid

The IRD recommends using either:

• FIFO (First In, First Out): The oldest assets are sold first.
• WAC (Weighted Average Cost): Averages the cost of all assets.

Both methods are accepted, but consistency is key. Pick one and stick with it.

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Tools to Make It Easier

Manually tracking crypto transactions is a nightmare. Thankfully, there are tools to help:

• Koinly: Automatically imports your trades, calculates gains/losses, and generates IRD-compliant reports.
• CryptoTaxCalculator: Another popular option with NZ support.
• myIR: Where you file your tax returns and manage your IRD account.

These platforms can save you hours—and help you avoid costly mistakes.

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Common Mistakes to Avoid

Crypto tax is still a grey area for many investors. Here are some pitfalls to watch out for:

1. Ignoring Crypto Trades

Even if you didn’t cash out to NZD, trading crypto is still taxable.

2. Forgetting About Airdrops and Rewards

If you received tokens for free, they might still be taxable—especially if it’s part of a business activity.

3. Not Reporting Losses (or Theft)

Losses and theft can reduce your tax bill, but only if you report them. There are specific rules around the value of what you can claim, so get good advice. And we don’t mean off some random self-proclaimed expert on TikTok.

4. Mixing Personal and Business Crypto

If you’re running a crypto-related business, keep those transactions separate from personal ones.

5. Falling for Scams

If it sounds too good to be true, it probably is. See this article and this guidance

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What If You’re a Crypto Business?

If you’re mining, staking, or trading crypto as a business, the rules are stricter. You’ll need to:

• Register for GST (if applicable)
• Keep detailed records of income and expenses
• File regular business tax returns

Talk to a crypto-savvy accountant to make sure you’re ticking all the boxes.

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Record-Keeping: Your Best Defence

The IRD expects you to keep records for at least seven years. That includes:

• Transaction dates
• Asset types
• Amounts
• NZD value at the time
• Fees paid
• Wallet addresses
• Exchange details

If you’re ever audited, these records will be your lifeline.

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What Happens If You Don’t Report?

Failing to report crypto income can lead to:

• Penalties
• Interest charges
• Audits
• Legal action

The IRD is actively cracking down on crypto tax evasion. It’s not worth the risk.

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How to File Your Crypto Tax Return

You’ll file your crypto income as part of your annual tax return via myIR. Here’s how:

1. Calculate your total crypto income and gains
2. Include it under “Other Income”
3. Attach supporting documentation if needed
4. Submit by 7 July (or later if using a tax agent)

If you’re unsure, work with a tax professional who understands crypto e.g. Epsomtax.com Limited

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Crypto Tax and Trusts

If you hold crypto in a trust, things get more complex. You’ll need to:

• Ensure the trust deed allows crypto investments
• Track transactions separately from personal ones
• File trust tax returns

Note that crypto bought in personal names could be held “in trust” for a trust, but you will need the documentation to back this up. Talk to your lawyer. Trusts can offer asset protection and tax planning benefits, but they require careful management.

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Planning Ahead: Tax Strategies for Crypto Investors

Want to reduce your tax bill legally? Here are some smart strategies:

1. Tax Loss Harvesting

Sell underperforming assets before the tax year ends to offset gains.

2. Long-Term Holding

If you’re not actively trading, holding assets may reduce taxable events.

3. Use FIFO or WAC Strategically

Choose the method that gives you the best outcome—just be consistent.

4. Work With a Specialist

A crypto accountant can help you structure your portfolio for tax efficiency.

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Final Thoughts: Stay Ahead of the Curve

Crypto tax in New Zealand is evolving fast. The IRD is watching closely, and the rules are tightening. But with the right tools, knowledge, and support, you can stay compliant and confident.

Whether you’re a casual investor or a full-time crypto trader, understanding your tax obligations is essential. So keep good records, use smart software, and don’t be afraid to ask for help.

Because in the world of crypto, knowledge isn’t just power—it’s profit. Talk to us today.