Inland Revenue info request to NZ crypto companies – Sept 2020

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UPDATE October 2020: Easy Crypto has coordinated a joint approach by the crypto industry in NZ to engage with the IRD on the request and explore alternative options. If this is an area you may be able to assist with, please get in touch.

Easy Crypto has not yet provided any information to the IRD.

It probably comes as no surprise that New Zealand’s Inland Revenue Department (IRD) has followed in the footsteps of the Australian Tax Office and the United States’ IRS by requiring cryptocurrency companies to provide information on their customers.

What was requested?

The IRD requested all info on customers who had bought or sold crypto prior to 31 March 2020.

The info requested included customer details (name, date of birth, address) and transaction details (coin type, amount, value, address). We will make the specific information that relates to your account available on your Account page to view. Look out for our announcement about this in our next newsletter in early October.

We understand that IRD has issued this requirement to all NZ cryptocurrency companies.

We think it is likely that we will get a similar request next year for info on transactions up to 31 March 2021.

Can’t you refuse?

We strongly believe in privacy and would never hand over personal information unless we were absolutely required to.

We sought multiple legal opinions on this one (including options for exemptions based on privacy, human rights, constitutional rights etc) and there are no grounds on which we can refuse.

Am I affected?

All Easy Crypto customers that are impacted were emailed on 27 September 2020 to advise them that their information has been requested.

Update: We are aware that our email service Postmark has had some delivery issues, so please look out for this email on either the 27th or 28th.

If you traded with other NZ based crypto companies prior to 31 March 2020 it is likely that your information has been passed on to the IRD.

You can use our portfolio tracker tool to see if you have any tax owing (or have a refund due!).

Under the “Tax Summary” section your 2020 Realised Gains / Losses shows the amount of tax you owe or are owed for the year to 31 March 2020.

To make sure this is accurate, click “see details” and check that all of your trades are showing correctly. If you have any trades that weren’t through Easy Crypto, you can easily add these in.

What can I do about it?

If you owe undeclared tax to the IRD, penalties and fines may apply. However, you can potentially get all the penalties waived by making a voluntary disclosure before the IRD audit you.

If you make a full and complete voluntary disclosure before we tell you you’re going to be audited or investigated, any shortfall penalty will be reduced by 75% or 100% if the tax shortfall was due to not taking reasonable care, taking an unacceptable tax position or an unacceptable interpretation.
If we’ve already notified you of a tax audit or investigation but you make a disclosure before it actually begins, any shortfall penalty will be reduced by 40%.

Source: Inland Revenue, Putting your tax returns right (IR280)

For more information on tax on cryptocurrency, see our blog article here, or the IRD’s info page here.

If you need a hand calculating your taxes check out Taxoshi, or for more personalised advice talk to Tim and the team at https://cryptocurrencytax.co.nz/

Any other questions? Hit us up!