In a surprising move, workers in New Zealand can now legally be paid in Bitcoin, reports CoinTelegraph.
This news comes to us via “tax information bulletin” that went live back on July 4. There, the New Zealand Inland Revenue Department outlined the rules, which it published under s 91D of the Tax Administration Act 1994 put out by the country.
Essentially, the framework notes that income tax of such assets is relevant to cryptocurrency payments that are only part of a worker’s salary and have a pre-established rate, as opposed to payments that are “part of an employee share scheme.”
That and the changes only affect workers who are paid via salary or wages. Anybody self-employed cannot participate. That said, salaried workers can be sure that cryptocurrency payments can go towards their bonuses, commissions, gratuities, and services in general.
However, these cryptocurrency payments can only be taxed if the place of employment and the employee agree that payments are never stuck in a “lock-up period,” rather that they are converted into local fiat almost right away. More on this:
“In the current environment where crypto-assets are not readily accepted as payment for goods and services, the Commissioner’s view is that crypto-assets that cannot be converted directly into fiat currency on an exchange […] are not sufficiently “money-like” to be considered salary or wages.”
Essentially, both parties are agreeing that the payment is made in a currency rather than defining cryptocurrencies as a store of value. The document specifically defines these assets as “money-like” in that they aren’t something like a voucher or a stock, but genuinely a peer agreed-upon form of payment.
We’ll have to see how these changes play out, and if they’ll affect other countries in the world that are looking at cryptocurrencies and regulations surrounding them. Only time will tell that.
