Crypto service providers who fail to take “reasonable care” to comply with the requirements might face fines ranging from 20,000 to 100,000 New Zealand dollars ($12,000 to $62,000).
The Minister of Revenue in New Zealand has introduced a new proposal to adopt 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, introduced a bill titled “Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures).”
This bill includes provisions to confirm annual income tax rates, introduce tax relief measures, implement the OECD’s Crypto-Asset Reporting Framework (CARF), and make amendments to the Common Reporting Standard (CRS).
New Requirements for Crypto Service Providers
As part of this new initiative, crypto-asset service providers (RCASPs) operating in New Zealand will be required to begin gathering information on reportable users who use their platforms starting April 1, 2026.
Additionally, these providers must submit this data to Inland Revenue by June 30, 2027.
The information collected by Inland Revenue will be shared with relevant tax authorities around the world if it concerns reportable users in other countries.
This exchange of information is expected to be completed by September 30, 2027.
In simple terms, crypto traders using exchanges in New Zealand will have their transaction data reported to the government.
The tax agency stated that this measure aims to ensure that profits from crypto trading are properly taxed.
The agency also highlighted that, with the growth of crypto assets, tax authorities currently lack visibility over income generated from crypto trading.
There is a growing international push to ensure tax authorities “retain visibility over income or investment earning opportunities that are facilitated for individuals through large-scale intermediaries.”
Penalties for Noncompliance
The New Zealand government has outlined penalties for RCASPs that do not comply with the new reporting requirements.
Service providers could be fined 300 New Zealand dollars ($186) for each instance of noncompliance with CARF requirements, with a maximum penalty of 10,000 NZD ($6,200).
However, the government specified that RCASPs will not be liable for penalties if the noncompliance was due to circumstances beyond their control.
If service providers fail to take “reasonable care” to comply with CARF requirements, they could face fines ranging from 20,000 to 100,000 NZD ($12,000 to $62,000).
Users who do not provide the necessary information to comply with the reporting rules may also be subject to a fine of 1,000 NZD ($621).
