The New Zealand Tax Department has just issued guidance on salary payments made in Bitcoin and other cryptocurrency. This confirms that such payments are entirely within the law, and clarifies how to deal with them in accounting.
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The ruling covers payment of wages or salary (including bonuses) either wholly or in part using cryptocurrency. Payments must be for services performed as employment, and the ruling does not apply to any crypto-assets provided as a ‘share’ under an employee share scheme.
The crypto-assets paid should be able to be directly converted to fiat currency via an exchange, and a significant functionality of the asset should be as a currency.
When these conditions met, the new tax rules treat payment in cryptocurrency as a normal part of the employee’s salary or wages. As such, they are subject to pay as you earn (PAYE) income tax at the usual rates. This should be deducted by the employer and paid to the inland revenue (in New Zealand dollars). Read More at Bitcoinist...