Thomas Daniels
Crypto service providers in New Zealand who fail to exercise “reasonable care” in adhering to new reporting requirements may face fines ranging from 20,000 to 100,000 New Zealand dollars ($12,000 to $62,000). This comes as part of a new legislative proposal aimed at integrating the crypto-reporting framework developed by the Organisation for Economic Co-operation and Development (OECD).
On August 26, Simon Watts, New Zealand’s Minister of Revenue, presented a bill titled “Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures).” This legislation aims to establish annual income tax rates, introduce tax relief measures, implement the OECD’s Crypto-Asset Reporting Framework (CARF), and amend the Common Reporting Standard (CRS).
New Compliance Obligations for Crypto Service Providers
Under the new framework, Reporting Crypto-Asset Service Providers (RCASPs) operating in New Zealand will be required to gather data on reportable users from their platforms, beginning April 1, 2026. These providers must submit the collected information to Inland Revenue by June 30, 2027. Data relevant to users in other jurisdictions will be shared with international tax authorities by September 30, 2027.
Effectively, this means that crypto exchanges based in New Zealand will be required to report user transaction data to the government, ensuring proper taxation of profits from crypto trading. Inland Revenue emphasized that the growth of crypto assets has led to significant gaps in tax authorities’ oversight of income derived from crypto trading. The agency highlighted an increased global push to ensure that tax authorities maintain visibility over income or investment opportunities facilitated through large-scale intermediaries.
Penalties for Noncompliance
Noncompliance with the new reporting rules will result in fines for RCASPs, starting at 300 New Zealand dollars ($186) per instance of failing to meet CARF requirements, with a maximum penalty of 10,000 NZD ($6,200). However, RCASPs will not face penalties if noncompliance is due to circumstances beyond their control. Conversely, service providers who do not take “reasonable care” to comply may incur fines between 20,000 and 100,000 NZD ($12,000 to $62,000).
Users failing to provide necessary information for compliance will also face penalties, amounting to 1,000 NZD ($621).
