28 Sep 2020

IRD to begin probing crypto-currency investors

4:39 pm on 28 September 2020

Inland Revenue is upping its attention to crypto-currency investors by asking companies dealing in them to hand over their customer details.

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Photo: 123rf.com

It's requested all firms pass on customers' personal details as well as the type and value of their crypto assets.

"IRD is requesting this information to enhance our understanding of the cryptoasset environment in New Zealand so we can work out how best to help taxpayers meet their income tax obligations," it said in a statement.

Chief executive of Easy Crypto, Janine Grainger, said she was disappointed by the request but not surprised.

"I guess [IRD] is just widening its net of the tax base and crypto assets are something that is definitely growing in popularity and we're seeing a huge increase in New Zealanders getting involved."

However, she said the requirement to hand over customer's personal information was "heartbreaking".

"Privacy is really important to us... one of the tenets [of] cryptocurrency in general is around having freedom and autonomy and privacy."

"While many people might think 'I have nothing to hide therefore, what do I care?' the point of privacy isn't to aid people who have something to hide, it's to ensure we have a fair, open and free society."

Grainger said Easy Crypto would comply with IRD's request, after it found there was no legal grounds to refuse handing over the information.

IRD said it's in the early stages of its inquiry and it's too early to say what the response had been amongst firms.

If taxpayers were concerned that they had not met their tax obligations, they could make a voluntary disclosure to IRD, it said.

Earlier this month, IRD issued a new guidance on how crypto assets would be taxed.

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