New Zealand Allows Salaries in Cryptocurrencies

New Zealand authorities have issued a tax bulletin on August 7 that makes it legal to pay employees in crypto. The new law will be implemented from September 1. This makes the nation one of the first to create a legal framework that allows employees to be paid in crypto. However, the new rules do not apply to self-employed individuals.

Salary Payment with Conditions

The bulletin added a few conditions. For one, when employees are paid in crypto, there can be no lockup period. Additionally, the coins need to be easy to convert into fiat currency. According to an official of the nation’s revenue body, some crypto coins have characteristics of money in that they are divisible and hard to counterfeit. However, crypto will still be considered a form of property and not legal tender. With their new criteria as a payment means, crypto will be subject to the PAYE income tax scheme.

Another requirement is that when employees are paid in crypto, they still have to pay taxes in NZD. As such, the revenue department will not accept BTC. It will expect taxpayers to convert their coins in NZD. The payment of tax will be determined according to the valuation at the time the transaction was made whether or not the price of BTC has risen or fallen since then.

While the authorities in New Zealand have not been hostile to crypto, they’ve previously been skeptical. Cryptocurrency exchanges have not been allowed to operate in the nation and they’ve been doing so without a clear legal framework.