New Zealand doesn’t have a traditional capital gains tax system. Sounds like a tax haven, right? Not so fast — the Inland Revenue Department (IRD) often taxes crypto as income, especially if you buy it with the intent to resell.
That makes NZ one of the trickiest jurisdictions: same transaction could be tax-free for one person, fully taxable for another. Here’s the breakdown 👇
🔎 How IRD Classifies Crypto
- Crypto is not legal tender; it’s property.
- NZ doesn’t have a general CGT, but IRD says:
- If you bought crypto to sell/trade for profit, your gains are taxable as income.
- If you can prove you bought it for another reason (rare), gains may be non-taxable.
- Frequent traders, miners, or stakers are almost always taxed as income earners.
💰 Income Tax on Crypto
- Gains from crypto trading/investing are usually taxed as ordinary income at your personal marginal rate (10.5%–39%).
- Applies when you:
- 💵 Sell crypto for NZD
- 🔄 Swap crypto for another token
- 🛒 Use crypto to buy goods/services
- Mining & staking rewards = taxable income at market value when received.
- DeFi lending/yield → generally income on receipt; disposal may trigger further tax.
Example:
- Buy BTC at NZD $20,000.
- Sell for NZD $30,000.
- If IRD says you bought to resell, the $10,000 is taxable income.
🧾 No Capital Gains Tax… But
- There’s no separate CGT regime, but crypto is effectively taxed like capital gains via income rules.
- If IRD accepts you didn’t acquire for resale, gains may be non-taxable (rare in practice).
🎨 NFTs & Other Assets
- NFTs: buying/selling for profit = taxable income.
- NFT creators: income from sales.
- Play-to-earn tokens: income on receipt.
📉 Losses
- Losses from crypto trading can offset other income, if IRD accepts you’re carrying on a taxable activity.
- But you need proper records — intent matters.
🕵️ IRD Enforcement in 2025
- IRD actively monitors crypto; exchanges share user data.
- Expect audits if you trade frequently but don’t declare.
- Penalties for non-compliance include interest, fines, and possible prosecution.
🛠️ Compliance Checklist
- Assume crypto profits are income unless you can prove otherwise.
- Track every trade in NZD, with cost basis and disposal value.
- Report staking, mining, and yield income annually.
- Keep records for at least 7 years.
✅ Key Takeaways (New Zealand)
- No CGT, but most crypto profits taxed as income (up to 39%).
- Staking, mining, NFTs, DeFi → income on receipt.
- Losses may offset other income (if recognised as business/trading).
- IRD is strict — most traders are taxable.