1. Is crypto considered property or currency in NZ?

Crypto is treated as property under NZ tax law. This means every disposal (swap, sell, spend, stake, or convert) is a taxable event, similar to buying and selling shares.

2. What activities are taxable?

Anytime you dispose of a token, including:

• Selling crypto for fiat

• Swapping one token for another

• Spending crypto on goods or services

• Wrapping/unwrapping tokens

• Bridging across chains

• Entering staking/lending pool

Note: Transfers between wallets you own are not taxable.

3. How are staking rewards and yield-bearing tokens taxed?

Staking and yield rewards are taxed as income, based on the market value at the date received.

4. Are NFT profits taxable?

Yes. Selling NFTs is taxable, and profits = sale price minus purchase price. If you're minting, flipping, or receiving NFT airdrops, expect scrutiny.

5. What about airdrops?

• Unsolicited airdrops (you didn’t do anything to receive them) are taxable only on sale.

• Solicited airdrops (you claimed or worked for them) are taxable on receipt, and the profit on sale is also taxable.

6. What about holding vs investing vs trading?

IRD assumes most crypto is acquired with an intention to dispose for profit. This means even long-term holders are usually taxed on gains. The burden of proof is on you to show otherwise, which is difficult.

7. How is profit calculated?

Profit = Sale price – Purchase price

Tax is applied to that profit at your marginal income tax rate (up to 39%).

8. Are crypto losses deductible?

Yes. Losses can be offset against other income or gains. Crypto is not “ring-fenced” like residential retnal property losses are.

9. Is converting from one crypto to another taxable?

Yes. Swapping BTC for ETH is a taxable event, even if no fiat is involved. This includes trading into stablecoins (e.g., USDC or USDT).

10. What records should I keep?

Keep detailed records of every trade and transaction:

• Date and time

• Type and quantity of crypto disposed of

• Type and quantity of crypto acquired (if in a trade or swap)

• Value in NZD at the time

• Wallet or exchange used

• Fees and associated costs

Pro tip: Reconcile monthly and download exchange data regularly. Have screenshots of your holdings as evidence. Exchanges can disappear.

11. What if I just move crypto between wallets I own?

No tax, provided the wallet belongs to you and no disposal occurs.

12. Should I use a company or trust to hold crypto?

Generally not worth it unless you have a large portfolio or commercial activity (e.g., mining business). The admin, complexity, and risks often outweigh tax benefits for most. There are some situations where it is worth considering.

13. What are the IRD’s audit triggers for crypto?

IRD uses data-matching from exchanges like Easy Crypto, Kraken, KuCoin. If your return doesn’t align with exchange-reported info, that may trigger an audit.

14. Can I use crypto tax software?

Be cautious. Many tools get things wrong, especially with:

• Token swaps

• Airdrops

• Bridged assets

• Missing purchase history

We’ve seen cases where clients overpaid tax by $600k using off-the-shelf software. Our custom in-house system is designed to handle NZ-specific tax rules and reconciliations.

15. Do I need to report my holdings to IRD?

Not by default. But if IRD audits you or requests records, you must provide detailed transaction history and wallet balances.

17. Where can I learn about future tax law changes?

We publish a monthly email update with crypto tax news, IRD guidance, and rule changes. Let us know if you'd like to be added.

If you have further questions or need help with reconciliation, reporting, or strategy, feel free to get in touch.