New Zealand to Adopt OECD Crypto Reporting Framework
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Highlights:
- New Zealand proposes adopting OECD’s Crypto Reporting Framework by April 2026.
- Non-compliance fines for crypto service providers range from 300 to 10,000 New Zealand Dollars.
- New Zealand’s stricter crypto rules aim to enhance tax compliance.
On August 26, New Zealand’s revenue minister proposed implementing the crypto-reporting framework developed by the Organisation for Economic Co-operation and Development (OECD). Minister Simon Watt introduced a new bill titled “Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures).”
In the bill, Watts proposed confirming annual income tax rates, introducing tax relief measures, implementing the OECD’s Crypto-Asset Reporting Framework (CARF), and updating the Common Reporting Standard (CRS).
#New Zealand's Minister of Revenue introduced a bill to implement the #OECD's #Crypto-Asset Reporting Framework (#CARF), requiring crypto service providers to report user data to tax authorities.
Noncompliance could result in fines ranging from $12,000 to $62,000. The new… pic.twitter.com/90HdoX7Ms6
— TOBTC (@_TOBTC) August 27, 2024
New Zealand Crypto Reporting Rules: Fines, Deadlines, and Data Submission
The proposed amendments will take effect on April 1, 2026. From that date, New Zealand-based crypto service providers must collect transaction information from reportable users who conduct transactions through their platforms. The New Zealand government has announced that service providers who fail to comply with the new reporting measures will face fines of 300 New Zealand dollars ($186) per non-compliance incident. The maximum penalty is set at 10,000 NZD ($6,200)
The agency specified that RCASPs will not face penalties if non-compliance is due to factors beyond their control. However, if service providers fail to exercise “reasonable care” in meeting CARF requirements, they may be fined between 20,000 and 100,000 NZD ($12,000 to $62,000). Moreover, users who do not provide the required information for compliance with the reporting rules may face a 1,000 NZD ($621) fine.
Service providers must submit this information to Inland Revenue by June 30, 2027. Inland Revenue will then share the data with relevant tax authorities by September 30, 2027.
Simply put, traders using exchanges in New Zealand will have their transaction data reported to the government. This ensures the tax agency properly taxes profits from crypto trading. The government agency emphasized that tax authorities lack visibility over income from crypto trading due to the growth of crypto assets. Moreover, the agency noted a global push for tax authorities to oversee income and investment opportunities provided by large intermediaries.
New Zealand Advances Stricter Crypto Oversight Following Calls for Regulatory Changes
Earlier this year, Andrew Bayly, New Zealand’s Minister of Commerce and Consumer Affairs, urged a major shift in regulating digital assets and blockchain technology. In response to questions from the parliamentary Finance and Expenditure Committee about cryptocurrencies, Bayly’s office warned that New Zealand’s “wait and see” approach could prevent the country from benefiting from advances in the digital asset industry.
The ministry’s advisers proposed eight key recommendations to align New Zealand with the global crypto trend. These include adopting policies to support digital asset and blockchain growth, promoting government-industry collaboration, addressing skill shortages via immigration, and developing training and educational resources.
FOMO
Andrew Bayly, the Minister of Commerce and Consumer Affairs, cautioned against New Zealand's passive stance, emphasizing that it might result in overlooking the advantages of progress within the digital asset sector.
— Crypto with Vishal (@CryptoWthVishal) April 10, 2024
Moreover, last month, New Zealand’s tax authority adopted a proactive approach, targeting crypto traders who failed to declare their earnings on tax returns. The Inland Revenue Department (IRD) revealed that it had identified 227,000 crypto users in New Zealand who were involved in around 7 million transactions totaling NZ $7.8 billion (USD $4.7 billion). Since 2018, the department has treated cryptocurrency as property for tax purposes, meaning profits from buying, selling, or trading crypto are likely taxable.
