New Zealand sanctions wages paid in cryptocurrencies
13 August 2019
New Zealand has become the first country legally to back companies that are paying employees in cryptocurrencies.
According to the Financial Times, the ruling by New Zealand’s tax authority allows salaries and wages to be paid in cryptocurrencies such as bitcoin from 1 September, as long as the payments are in regular, fixed amounts. The digital currency of choice must also be pegged to at least one regular currency and must be able to be converted directly into a standard form of payment.
The ruling, which was outlined by New Zealand’s Inland Revenue, excludes self-employed taxpayers from earning incomes in cryptocurrencies. Companies that choose to pay their employees in crypto will be able to deduct tax under New Zealand’s pay as you earn income tax scheme.
Legality of Cryptocurrency
Cryptocoinbase states that the new technology and the community around cryptocurrencies, which have become a new mainstream trend, have increasingly attracted the attention of law enforcement and policymakers. The legality of cryptocurrency depends on who you are, where you live, and what you are doing with it.
Due to the fact that cryptocurrency is anonymous and decentralised, regulators apparently have a hard time controlling it. However, as many legal authorities are beginning to learn and understand the cryptocurrency, new laws and regulations may come into force.
Cryptocurrency has various legal aspects to consider depending on the country. Some countries class cryptocurrency as money and legal, some class it as an asset and legal, some class it as neither illegal nor legal, with no legal frameworks in place. The tax situation may differ for those countries that class it as an asset rather than a real currency.