Cryptocurrency Salaries Now Legal In New Zealandbr>
New Zealand‘s tax authorities have said in a recent ruling that it is legal for companies to pay its employees in cryptocurrencies.
In a tax information bulletin, the New Zealand Inland Revenue Department said that the ruling, which is expected to take effect on September 1, was made under the Tax Administration Act 1994. The ruling allows salaries and wages to be paid in cryptocurrencies, such as bitcoin, as long as the payments are in regular, fixed amounts. The value of the crypto-asset must also be pegged to one or more fiat currencies and must be able to be “converted directly into fiat currency (on an exchange).”
“To be considered “salary or wages” the crypto-assets need to be sufficiently similar to existing notions of salary and wages,” the ruling said. “In the current environment where crypto-assets are not readily accepted as payment for goods and services, the Commissioner’s view is that crypto-assets that cannot be converted directly into fiat currency on an exchange … are not sufficiently “money-like” to be considered salary or wages.”
According to the ruling, companies that choose to pay their employees in crypto will also be able to deduct income taxes under New Zealand’s pay as you earn income tax scheme.