New Zealand will review taxes applicable to crypt currencies

   The New Zealand Revenue Authority is evaluating the prospects of eliminating the application of the Goods and Services Tax on crypt currencies.

Under current legislation, bitcoin and other digital currencies fall into the "ownership" category and are subject to a 15% tax on goods and services when transferring an asset from one owner to another. This approach generates a lot of discontent, as in fact there is a situation of double taxation, when the user later pays tax on income.

The country's tax administration admits that this situation is "unfavorable" and proposes not to apply the tax on goods and services to crypt currencies, but to leave the income tax at that. According to the regulator, the functions of crypt-currency are not limited to the investment component, so it is sometimes quite difficult to apply the current tax law to them.

The agency plans to make sure that cryptovalues are regulated by the same tax laws that apply to other alternative investment products. However, this issue raises a problem - different tokens may apply in many scenarios and it is impossible to categorize them.

In the future, tokens that are used as currency or security may be taxed for goods and services, while taxation for some other types will remain the same. The Office acknowledges that it may be difficult to establish a token classification that covers all areas of application.

The New Zealand Revenue Authority will accept comments from interested market participants until April 9. It should be noted that earlier similar taxation of cryptovite was practiced in Australia, but in 2017 it was abandoned.