New Zealand Crypto Tax

Section 1 -- Quick Reference

Section 1 -- Quick Reference

Field	Value
Country	New Zealand (Aotearoa)
Tax	Income Tax on Cryptoassets
Currency	NZD — all values must be converted to NZD at the transaction date
Tax year	1 April -- 31 March (e.g., 2025 tax year = 1 April 2024 -- 31 March 2025)
Primary authority	Income Tax Act 2007 (ITA 2007), ss CA 1, CB 3, CB 4, CB 5; Goods and Services Tax Act 1985 (GST Act), ss 2(1), 3, 20H
Supporting guidance	IRD Cryptoassets guidance (ird.govt.nz/cryptoassets); Tax Information Bulletin Vol 34 No 5 (Jun 2022); TDS 25/23 (Oct 2025)
Tax authority	Inland Revenue (Te Tari Taake, IRD)
Filing portal	myIR (myir.ird.govt.nz)
Filing deadline	7 July following the tax year end (or 31 March of the following year if using a tax agent)
Capital gains tax	New Zealand has NO general capital gains tax — crypto taxation depends on the PURPOSE of acquisition
Validated by	Pending — requires sign-off by a New Zealand Chartered Accountant (CA) or tax advisor
Skill version	1.0

The Central Rule

New Zealand does not have a capital gains tax. Whether crypto profits are taxable depends on the taxpayer's dominant purpose at the time of acquisition. If you acquired crypto with the purpose of disposing of it (selling, exchanging, spending), profits on disposal are taxable income. If acquired purely as a long-term investment with no intention to sell, profits may not be taxable — but the burden of proof is on the taxpayer.

Conservative Defaults

Conservative Defaults

Ambiguity	Default
Unknown purpose at acquisition	Treat as acquired for purpose of disposal (taxable) — conservative
Trading vs investment unclear	Treat as taxable until taxpayer provides clear evidence of investment intent
Unknown cost basis method	Use FIFO unless taxpayer has documented another method
Staking rewards — income or capital?	Treat as income (taxable at receipt) — per IRD guidance and TDS 25/23
DeFi transaction classification	Treat token deposits to protocols as potential disposals unless clearly not
GST on crypto	Crypto sales are EXEMPT from GST; do NOT charge GST on crypto-for-fiat
Unknown tax residency	STOP — NZ residents taxed on worldwide income; non-residents on NZ-source only

Section 2 -- Classification Rules

Section 2 header

2.1 Legal Classification

2.1 Legal Classification

Term	Definition	Authority
Cryptoasset	A form of property for tax purposes; not legal tender	IRD guidance; ITA 2007
Property	Includes any real or personal property, estate or interest in property, and any right or interest	ITA 2007 s YA 1
Excepted financial arrangement	Cryptoassets are excluded from the financial arrangements rules	ITA 2007 s EW 5(22B)
Not money	Crypto is not "money" for tax purposes	IRD guidance

2.2 The Purpose-of-Disposal Test (s CB 4)

This is the key provision for NZ crypto taxation:

Under s CB 4 of the ITA 2007, an amount derived from disposing of personal property is income if the property was acquired for the purpose of disposing of it.

Purpose-of-Disposal Test factors table

Factor	Indicates Purpose of Disposal (Taxable)	Indicates NOT Purpose of Disposal
Stated intent at purchase	"I'll sell when it goes up"	"I'm holding for 10+ years regardless"
Holding period	Short (days to months)	Long (years)
Frequency of transactions	Many trades, frequent portfolio changes	Rare, infrequent transactions
Source of expected return	Price appreciation via trading	Passive income (staking) with no plan to sell underlying
Evidence	Trading history, stop-loss orders, leverage	Long-term wallet with no outflows
Profit expectation	Expected to profit more from disposal than passive income	Expected to earn more from staking/passive than from selling

2.3 Other Income Provisions

Even if s CB 4 does not apply (no purpose of disposal), crypto profits may still be taxable under:

Other Income Provisions table

Provision	Description
s CB 3 — Profit-making scheme	If the taxpayer carries on a profit-making undertaking or scheme
s CB 5 — Amount from business	If the crypto activity constitutes a business
s CA 1(2) — Income under ordinary concepts	Catch-all: regular, expected returns with the character of income

2.4 Burden of Proof

• Burden of proof — Per TDS 25/23 (Oct 2025): the onus is on the taxpayer to show they did NOT acquire crypto for the purpose of disposal. The Commissioner does not need to prove intent — the taxpayer must provide "clear and compelling evidence" of non-disposal purpose. (TDS 25/23 (Oct 2025))

Section 3 -- Rate Tables

Section 3 header

3.1 Individual Income Tax Rates (2025/26 Tax Year — 1 April 2025 to 31 March 2026)

Individual Income Tax Rates 2025/26 (ITA 2007 Schedule 1; rates confirmed by Taxation (Annual Rates for 2025–26) Act 2026.)

Taxable Income (NZD)	Marginal Rate
$0 – $15,600	10.5%
$15,601 – $53,500	17.5%
$53,501 – $78,100	30%
$78,101 – $180,000	33%
$180,001 and over	39%

• No tax-free threshold — There is no tax-free threshold in New Zealand — tax applies from the first dollar of income at 10.5%. (ITA 2007 Schedule 1)
• Crypto income aggregation — Crypto income is added to all other income to determine the applicable marginal rate.

3.2 Prior Year Rates (2024/25 Tax Year — 1 April 2024 to 31 March 2025)

Prior Year Rates 2024/25

Taxable Income (NZD)	Marginal Rate
$0 – $15,600	10.5%
$15,601 – $53,500	17.5%
$53,501 – $78,100	30%
$78,101 – $180,000	33%
$180,001 and over	39%

Note: The 2024/25 year had transitional composite rates due to mid-year threshold changes (effective 31 July 2024). For simplicity, use the full-year 2025/26 rates for the current year.

3.3 Company Tax Rate

Company Tax Rate table

Entity	Rate
Companies	28%
Trusts (trustee income)	39%

3.4 GST

GST treatment table

Transaction	GST Treatment	Authority
Sale/purchase of cryptocurrency	EXEMPT — not subject to GST	GST Act s 2(1), as amended; TIB Vol 34 No 5
Payment for goods/services using crypto	GST applies to the underlying supply, not to the crypto	Standard GST rules
NFT sales	Subject to GST — NFTs are NOT excluded from GST	GST Act (NFTs not covered by cryptocurrency exemption)
Mining as a service	Subject to GST at 15% if provided as a taxable supply	Standard GST rules

• GST Act amendment citation — Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Matters) Act — amended GST Act to exclude cryptocurrency from both "goods" and "services" definitions. NFTs remain GST-able. (Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Matters) Act)

Section 4 -- Cost Basis Methods

Section 4 header

4.1 Accepted Methods

Accepted Methods table

Method	Status
FIFO (First In, First Out)	Accepted; widely used
Weighted average cost	Accepted
Specific identification	Accepted if clearly documented
LIFO	Not standard; not recommended

• Consistency requirement — The taxpayer must choose a method and apply it consistently.

4.2 Cost Basis Components

Cost Basis Components table

Component	Included?
Purchase price in NZD (converted at transaction-date exchange rate)	Yes
Exchange fees and commissions on acquisition	Yes
Network/gas fees on acquisition	Yes
Exchange fees and commissions on disposal	Yes — deductible from proceeds
NZD conversion: use mid-market rate on transaction date	Yes

4.3 Trading Stock Rules

• Trading stock valuation — If cryptoassets are trading stock (held as part of a business of trading crypto), they must be valued at cost at the end of the tax year. Cryptoassets are excepted financial arrangements, so market-to-market valuation under the financial arrangements rules does NOT apply. (ITA 2007 s EW 5(22B); TIB Vol 34 No 5.)

4.4 NZD Conversion

• NZD conversion method — All transactions must be converted to NZD. Use the mid-market exchange rate on the date of each transaction. For crypto-to-crypto trades, determine the NZD value of the crypto disposed of at the time of the exchange.

Section 5 -- DeFi / Staking / Mining / Airdrop Treatment

Section 5 header

5.1 Mining

Mining table

Aspect	Treatment
Mining rewards received	Taxable income at FMV (NZD) on date of receipt
Classification	Income under ordinary concepts (s CA 1(2)) or business income (s CB 5)
Cost basis of mined coins	FMV at receipt (for future disposal calculation)
Expenses	Deductible if mining constitutes a business (electricity, equipment depreciation, etc.)
Hobby mining	Still taxable — income character depends on regularity and amount

5.2 Staking

Staking table

Aspect	Treatment
Staking rewards received	Taxable as income at FMV on date of receipt — per IRD guidance and TDS 25/23
Rationale	Regular receipt of staking rewards = "return on investment" = income under ordinary concepts
Cost basis of staking rewards	FMV at receipt date (for future disposal)
Disposal of staking rewards	Separately taxable event — gain/loss computed using receipt-date FMV as cost basis
Dominant purpose analysis	Even if underlying crypto was acquired for staking income (not disposal), staking rewards themselves are income; but the underlying crypto's disposal may NOT be taxable if staking was the dominant purpose

Key distinction (per TDS 25/23): If you bought crypto primarily to earn staking income, the staking rewards are income when received. But the profit on selling the original crypto may not be taxable if you can show your dominant purpose was passive income, not disposal. However, the burden of proof is on you, and IRD has taken aggressive positions.

5.3 Airdrops

Airdrops table

Aspect	Treatment
Airdrop from existing holding (fork/snapshot)	Income at FMV if received because of existing holdings; cost basis of NZD 0 if FMV unclear
Promotional airdrop (unsolicited)	Taxable at FMV when received — income under ordinary concepts
Airdrop for performing a service	Income at FMV — clearly taxable
Subsequent disposal of airdropped tokens	Taxable if acquired for purpose of disposal; cost basis = FMV at receipt

• Airdrop citation — IRD Issues Paper — "Income tax treatment of cryptoassets received from blockchain forks and airdrops" (Dec 2020, updated Jan 2026). (IRD Issues Paper — "Income tax treatment of cryptoassets received from blockchain forks and airdrops" (Dec 2020, updated Jan 2026))

5.4 DeFi

DeFi table

Activity	Treatment
DeFi lending (depositing crypto to earn interest)	Interest income taxable at FMV when received
Liquidity provision (AMM pools)	Depositing tokens to pool = potential disposal if different tokens received (LP tokens); gain/loss on the "sold" tokens
Receiving LP tokens	New asset with cost basis = FMV of tokens deposited
Removing liquidity	Potential disposal of LP tokens; acquisition of underlying tokens at FMV
Yield farming rewards	Income at FMV when received
Wrapping (e.g., ETH → WETH)	IRD position evolving — conservative: treat as disposal, though gain is typically nominal
Bridging to another chain	Similar to wrapping — conservative: potential disposal
Impermanent loss	Not specifically addressed; likely NOT deductible as a standalone loss
Borrowing against crypto (collateralized loan)	Generally NOT a disposal (you retain ownership); but if liquidated, that is a disposal

• DeFi citation — IRD Issues Paper — "Wrapping, bridging, lending, borrowing and staking cryptoassets" (ongoing). (IRD Issues Paper — "Wrapping, bridging, lending, borrowing and staking cryptoassets" (ongoing))

Section 6 -- NFT Treatment

NFT Treatment table

Aspect	Treatment
Purchase of NFT	Acquisition cost for future disposal
Sale of NFT at profit	Taxable if acquired for purpose of disposal (s CB 4)
Creation and sale (artist/creator)	Business income — fully taxable
NFT royalties (ongoing)	Income when received
NFT-to-NFT swap	Disposal of both NFTs — compute gain/loss on each
GST on NFT sales	Subject to GST at 15% — NFTs are NOT covered by the crypto GST exemption
NFT as trading stock	If held in a business, trading stock rules apply

• NFT GST exemption note — Important: The GST exemption for cryptocurrency explicitly does NOT extend to NFTs. A business selling NFTs must charge 15% GST on B2C sales to NZ customers. (GST Act s 2(1) as amended; TIB Vol 34 No 5.)

Section 7 -- Reporting Requirements

Section 7 header

7.1 Individual Filing

Individual Filing table

Requirement	Detail
Return type	IR3 — Individual Income Tax Return
Filing deadline	7 July following the tax year end (e.g., 7 July 2025 for 2024/25 tax year)
Extended deadline (tax agent)	31 March of the following year (e.g., 31 March 2026 for 2024/25 year)
Filing portal	myIR (myir.ird.govt.nz)
Crypto section	No dedicated crypto schedule — include net income (or loss) in the "Other income" section of the IR3
Income to declare	Net crypto income after deducting cost basis and allowable expenses
Loss to claim	If you made a taxable loss, declare it (must show profit would have been taxable)

7.2 When Must You File an IR3?

You must file an IR3 if you have taxable income from cryptoasset activity that is not already accounted for in your income tax assessment. This includes:

• Profits from selling/exchanging crypto (if taxable under s CB 4 or other provisions)
• Mining income
• Staking rewards
• Airdrop income
• DeFi lending/yield income
• NFT trading profits

7.3 Provisional Tax

Provisional Tax table

Who	Obligation
Residual income tax > $5,000	Must register as a provisional taxpayer and make provisional tax payments
Payment dates	Standard: 3 installments (28 Aug, 15 Jan, 7 May) — or use AIM (Accounting Income Method) for monthly payments

7.4 Record-Keeping

Record-Keeping table

Requirement	Detail
Retention period	7 years
Records to maintain	Full transaction logs, exchange records, wallet addresses, cost basis calculations, evidence of acquisition purpose, staking/mining logs
NZD conversion records	Exchange rates used for each transaction
Purpose documentation	Written record of intent at time of acquisition (emails, notes, investment strategy documents)
Burden of proof	On the taxpayer — must demonstrate acquisition purpose

Section 8 -- Loss Offset and Carry-Forward

Section 8 header

8.1 Loss Offset Rules

Loss Offset Rules table

Rule	Detail
Losses from crypto disposal	Claimable ONLY if the gain would have been taxable (i.e., acquired for purpose of disposal)
Offset against other income	Crypto losses can offset other income types within the same year (including employment income) — for individuals
Loss carry-forward	Available — excess losses can be carried forward to future years
Company loss carry-forward	Subject to shareholder continuity rules
Loss carry-back	NOT available for individuals

8.2 Key Principle

• Key principle for claiming loss — To claim a crypto loss, the taxpayer must demonstrate that if they had made a profit, it would have been taxable. This means showing that the crypto was acquired for the purpose of disposal (or under another income provision). You cannot claim a loss on crypto that was held as a non-taxable long-term investment.

8.3 Trading Stock Losses

• Trading stock losses — If crypto is trading stock in a business, losses on disposal are deductible business expenses. Year-end valuation at cost (not market) means unrealized losses are NOT deductible.

Section 9 -- Anti-Avoidance Rules

Section 9 header

9.1 General Anti-Avoidance (s BG 1)

• General anti-avoidance rule — The ITA 2007 contains a broad general anti-avoidance rule. Any arrangement that has a purpose or effect of tax avoidance may be voided by the Commissioner. This applies to crypto structures designed to avoid the purpose-of-disposal test. (ITA 2007 s BG 1)

9.2 Aggressive Position — "Clear and Compelling Evidence"

Per TDS 25/23, the IRD takes an aggressive view on crypto: if you claim your crypto was NOT acquired for the purpose of disposal, you need "clear and compelling evidence." Factors IRD will scrutinize:

• Subsequent trading history (even if you initially intended to hold)
• Whether you expected more return from disposal than from passive income
• Whether you used exchanges with easy sell functionality
• Pattern of behavior across multiple cryptoassets

9.3 Transitional Residents

Non-residents and transitional residents (new arrivals to NZ) may have different obligations:

Transitional Residents table

Status	Treatment
NZ tax resident	Worldwide crypto income taxable
Non-resident	Only NZ-source crypto income taxable (sourcing rules complex for crypto)
Transitional resident (first 4 years)	Exempt from tax on most foreign-source income, but NZ-source crypto income still taxable

• Transitional resident citation — ITA 2007 s HR 8; TDS discussed transitional resident crypto cases. (ITA 2007 s HR 8)

9.4 Information Sharing

Information Sharing table

Measure	Detail
CRS (Common Reporting Standard)	NZ participates; financial account data shared with other jurisdictions
CARF (when implemented)	Crypto-specific exchange-of-information framework — NZ expected to adopt
Domestic exchange cooperation	NZ-based exchanges cooperate with IRD on data requests

Section 10 -- Worked Examples

Example 1 -- Crypto Acquired for Purpose of Disposal (Taxable)

Input: NZ tax resident, employed full-time (salary $85,000). Bought 2 ETH on Easy Crypto NZ in July 2024 for NZD $6,000 total. Sold 2 ETH in January 2025 for NZD $10,000. Exchange fees: NZD $100. Bought with explicit intention to "sell when ETH hits $5,000 per coin."

Computation:

Tax year:                2024/25 (1 Apr 2024 – 31 Mar 2025)

Disposal proceeds:       $10,000
Less exchange fees:        -$100
Net proceeds:             $9,900

Cost basis (FIFO):        $6,000
Gain:                     $3,900

Purpose test:            Acquired to sell at target price → purpose of disposal → TAXABLE

Total income:            $85,000 salary + $3,900 crypto = $88,900

Tax on crypto gain:      Marginal rate at $85,001–$88,900 = 33%
Additional tax:          $3,900 × 33% = $1,287

Reported in IR3 filed by 7 July 2025 (or 31 March 2026 via tax agent).

Example 2 -- Staking Rewards with Non-Disposal Purpose on Underlying

Input: NZ tax resident. Bought 100 SOL in May 2024 for NZD $20,000. Primary purpose: stake for passive income. No intention to sell the underlying SOL. Earned 5 SOL in staking rewards over 2024/25 tax year, FMV of NZD $1,000 at receipt dates. In February 2025, sold all 5 staking reward SOL for NZD $1,200.

Computation:

Step 1 — Staking rewards received:
  Income at receipt:     $1,000 (taxable as income under ordinary concepts per TDS 25/23)

Step 2 — Disposal of staking rewards:
  Proceeds:              $1,200
  Cost basis:            $1,000 (FMV at receipt)
  Gain:                  $200

  Purpose test on staking rewards: acquired through staking, subsequently sold
  → likely purpose of disposal → gain of $200 is TAXABLE

Step 3 — Original 100 SOL:
  NOT sold — no disposal event
  If sold later: taxpayer would argue dominant purpose was passive income (staking),
  not disposal → potentially NOT taxable. But burden of proof on taxpayer.

Total crypto income for year:  $1,000 (staking) + $200 (gain on reward disposal) = $1,200
Added to other income for progressive rate computation.

Example 3 -- Long-Term Holder (NOT Taxable)

Input: NZ tax resident. Bought 1 BTC in 2019 for NZD $8,000. Documented investment strategy: "long-term store of value, part of retirement savings, no plan to sell for at least 15 years." Sold in 2025 for NZD $95,000 due to unexpected medical emergency. Has written investment policy, no trading history, 6-year hold, single transaction.

Computation:

Proceeds:              $95,000
Cost basis:             $8,000
Gain:                  $87,000

Purpose test:          NOT acquired for purpose of disposal — compelling evidence:
  - Written investment policy
  - 6-year holding period
  - No other crypto trades
  - Sale triggered by unforeseen emergency
  - Employed full-time separately

Tax:                   Likely NOT TAXABLE — investor, not trader

CAUTION: IRD could challenge this. Taxpayer should retain all evidence.
Flag for reviewer: confirm purpose-of-disposal analysis.

Self-Checks

Before finalising any New Zealand crypto tax computation, verify:

• Has the taxpayer confirmed NZ tax residency (or transitional resident status)?
• What was the dominant purpose at the time of acquisition? Is there evidence?
• Are all values converted to NZD at the transaction-date mid-market rate?
• Has the correct cost basis method been applied consistently (FIFO or weighted average)?
• Have staking/mining/airdrop receipts been included as income at FMV?
• Is crypto treated as trading stock if part of a business?
• GST: confirmed crypto sales are EXEMPT; confirmed NFT sales are subject to GST?
• If claiming a loss: would the gain have been taxable? (Required to claim the loss)
• Provisional tax: does residual tax exceed $5,000?
• Filing deadline: 7 July (or 31 March via tax agent)?
• Are DeFi transactions analyzed individually for disposal/income events?
• Flag for reviewer: has IRD issued any updated guidance since this skill was written?

PROHIBITIONS

• NEVER state that NZ has a capital gains tax — it does not; crypto taxation is based on purpose of acquisition
• NEVER assume all crypto profits are tax-free — the purpose-of-disposal test makes most active trading taxable
• NEVER ignore the burden of proof — taxpayer must prove non-disposal intent, not the other way around
• NEVER charge GST on crypto-for-fiat sales — cryptocurrency is exempt from GST
• NEVER treat NFTs the same as crypto for GST — NFTs ARE subject to GST
• NEVER ignore staking rewards as income — IRD and TDS 25/23 confirm they are taxable
• NEVER allow a loss claim on crypto that was held as a non-taxable investment
• NEVER use market value for trading stock year-end — must use cost (excepted financial arrangement)
• NEVER treat transfers between own wallets as disposals
• NEVER ignore the transitional resident exemption for new NZ arrivals
• NEVER present crypto tax positions as definitive — the purpose test is fact-specific; always flag for professional review

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a New Zealand Chartered Accountant (CA), tax advisor, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

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