IRD to clamp down on crypto currency traders

Inland Revenue is clamping down on businesses and traders who use cryptocurrency, reminding them to be aware of the consequences of avoiding tax obligations.

Photo: AFP

IRD customer segment leader Tony Morris said the organisation was working on ways to eliminate abuse of the system.

“People who may be non-compliant … are something we‘re looking at, and how we can improve the information we get and work closely with international authorities to work out how we can best do that.”

Digital currencies such as Bitcoin are viewed in a similar vein to mainstream currencies when it came to tax. This meant traders in cryptocurrency had to pay tax on any capital gain.

Inland Revenue has been swamped with enquiries as to the tax status of cryptocurrencies and has responded by issuing an FAQ on its .

Countries such as South Korea and Thailand have created, or are in the process of creating, legislation to deals with cryptocurrencies.

That option was on the table but some time away, Mr Morris said.

“Tax rules are quite old. Things like cryptocurrency are quite new so it‘s not always an obvious answer.”

“It‘s still early days on the policy and legislative front … we‘re looking at the whole policy settings around this and other things, so too early to say whether we would – but we‘re certainly looking at what might be needed going forward.”