A Green Light for Bitcoin Salary Regulations in New Zealand
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The official bulletin was posted just last week by New Zealand’s Inland Revenue Department (IRD), who stated that this decree is in line with the Tax Administration Act 1994. Employers get to keep the PAYE (pay as you earn) frameworks from the Income Tax Act 2007 when it comes to calculating taxes, avoiding a need for more drastic changes in their accountancy departments.
Getting Into the Specifics
No one is expecting the government to allow employees to receive income in Bitcoin without a string or two attached, and believe it or not, it is for everyone’s good.
According to the regulations put forward, official staff members will be the only ones eligible to receive remuneration for offered services, bonuses, commissions and the likes. More precisely, the possibility does not apply to self-employed taxpayers.
What is more, the amount paid out in crypto will be further restricted to one’s regular salary, in order to link it to a fixed amount or exchange rate, excluding any share payout schemes as well. The IRD explicitly state on their official website that, for tax purposes, cryptocurrencies will be regarded as property rather than foreign exchange. Here is what they stated on the matter in the official information bulletin:
“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.”
As it stands, other than its initial crypto state, the employee’s income is primarily intended for conversion into fiat. This is an added protection for the average working man, as it restrains companies from paying out their employees in low or no-value altcoins.
From a different point of view, this move also sets out to benefit the tax office making it. They have been aware of companies having adopted this practice for some time now, all in order to evade the tax charges due to the unregulated state of crypto affairs. This has all come to an end with the new provisions, bringing tax money back into the state budget, regardless if it’s fiat or crypto.
The Domino Effect on NZ Casinos
A tricky state of the NZ online gambling scene has left many crypto casino operators looking for an alternate solution in order to remain above the law, and still protect their player pool. With crypto presenting itself as the ultimate solution to anonymity, there is no question about its popularity among NZ online casino and gambling enthusiasts.
And with the new tax policy allowing their employers to pay out salaries in Bitcoin, there really doesn’t seem to be a losing side to this deal. Since most players actually support themselves from daily jobs, all they need to do now is use that income on their favorite sites. Surely enough, companies that were already doing this to make use of the until-recent crypto tax hole will need to get back into the somewhat tedious habit. However, legal and rightful operations are sure to pay off in the long term.
The only issue remaining is one of the cryptocurrencies’ fluctuations, which could cause employees to lose or double their salary, as well as savings, depending on an overnight shift. Possibilities abound, and it is up to each individual to decide what to do with their crypto potential.
