New Zealand has taken a significant step toward tightening its oversight of cryptocurrency transactions by introducing a new tax bill that incorporates the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF). The bill, titled “Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures),” was introduced on August 26 by Simon Watts, New Zealand’s Minister of Revenue.
Key Provisions of the Tax Bill
The newly proposed legislation aims to confirm annual income tax rates, introduce tax relief measures, and implement both the OECD’s CARF and amendments to the Common Reporting Standard (CRS). A significant part of the bill focuses on requiring crypto service providers in New Zealand to adhere to stricter reporting requirements.
Starting April 1, 2026, reporting crypto-asset service providers (RCASPs) based in New Zealand will be mandated to collect detailed information on reportable users who utilize their platforms. This data must then be submitted to Inland Revenue by June 30, 2027. The collected information will be shared with relevant tax authorities globally if it involves users from other jurisdictions, ensuring compliance with international tax obligations.
Impact on Crypto Traders and Providers
For traders using cryptocurrency exchanges in New Zealand, this new regulation means that their transaction data will be reported to the government, ensuring that profits from crypto trading are properly taxed. The move addresses a long-standing concern among tax authorities about the lack of visibility over income generated from crypto trading.
The Inland Revenue emphasized that the rapid development of crypto assets has made it increasingly challenging for tax authorities to monitor income from these activities. The global push for greater transparency aims to prevent tax evasion by ensuring that income or investment earnings facilitated through large-scale intermediaries are adequately reported.
Penalties for Noncompliance
The bill outlines strict penalties for RCASPs that fail to comply with the new reporting measures. Service providers could face fines of 300 New Zealand dollars (NZD) ($186) per instance of noncompliance, capped at 10,000 NZD ($6,200). However, if a service provider fails to take “reasonable care” in meeting CARF requirements, they could be subject to more severe fines ranging between 20,000 and 100,000 NZD ($12,000 to $62,000).
Additionally, users who do not provide the necessary information for compliance with the reporting rules could face fines of up to 1,000 NZD ($621).
The government has clarified that RCASPs will not be penalized for noncompliance if the failure was due to circumstances beyond their control, offering some protection to service providers under exceptional conditions.
The introduction of this tax bill marks a significant development in how New Zealand regulates the rapidly evolving cryptocurrency market. By aligning with the OECD’s CARF, New Zealand joins a growing list of countries working to ensure that tax authorities have the tools necessary to track and tax crypto-related income. This move is likely to influence how other jurisdictions approach crypto regulation and taxation in the coming years.
