Legal salary in crypto. New Zealand experience

New Zealand has recently adopted changes that allow to pay salaries in crypto. The aforesaid changes were implemented by New Zealand’s tax authority under the Income Tax Act with regard to section RD 3.

The Inland Revenue Department (IRD) states that released rules applies to salaries and wages paid up in cryptocurrencies such as Bitcoin, Ethereum or other. An employee can receive salary in crypto assets as long as payments are made regularly, the amount is fixed and employment agreement is in place.

As you may know, cryptocurrencies are mostly unregulated, and as it was explained by IRD, cryptocurrency, that would be paid as a salary, should: (1) be convertible directly into a standard form of payment; (2) have the primary purpose of acting like a currency; or (3) be pegged to the price at least of one fiat currencies.

The ruling, which was outlined by IRD, excludes self-employed taxpayers from incomes in cryptocurrencies. Firms that decided to pay their employees in crypto will be able to deduct tax under New Zealand’s ‘pay as you earn income’ tax scheme.

Thomas Hulme, a solicitor at London-based law firm, said:

"The aforesaid move amounted to another step towards governments recognizing that actually people are wanting to be paid in crypto. Such demand represented a cultural change. Some people would rather deal with their wealth in that medium."

Crypto enthusiasts around the world welcomed this announcement on social media and marked it as another crucial step toward a globally crypto integration.

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