New Zealand’s tax authority has published new guidelines permitting the use of cryptocurrency to pay worker salaries, effective September 1, 2019. The published guidelines emphasize that digital currencies are still not considered legal tender, and any salary or wage payments that utilize them must comply with the country’s tax laws.
Under the ruling, allowable crypto asset wage and salary payments must be for a fixed amount, part of the employee’s regular remuneration, and be delivered for “services performed by the employee under an employment agreement.”
In addition, the Commissioner of Inland Revenue’s ruling is only applicable to workers who receive salaries or wages. It does not apply to taxpayers who are self-employed.
The ruling also says that the crypto assets used for any wage or salary payments cannot be “subject to a ‘lock-up’ period,” and must be capable of being converted into fiat currency. That excludes any digital assets that employees are prevented from converting for any “material period of time” after payment. The digital assets must also be designed to “function like a currency” or have value that is pegged to fiat currency.