Crypto and Digital Assets Tax in New Zealand

Cryptocurrency and digital assets are increasingly common investments in New Zealand, but many people are unsure about their tax obligations. While NZ doesn’t have a general capital gains tax, crypto profits are often taxable depending on your circumstances. Here’s what you need to know.

Are Crypto Profits Taxable in NZ?

It depends on why you bought the crypto. Under New Zealand tax law, profits from selling property (including digital assets) are taxable if you acquired it with the purpose or intention of disposal — meaning you bought it planning to sell it for a profit.

In practice, IRD considers most cryptocurrency to be acquired with an intention to sell, making the profits taxable as ordinary income. This applies to:

• Trading or speculating on crypto price movements
• Buying crypto as an investment with the intention of selling when the price rises
• Mining or staking crypto (the value received is income)
• Getting paid in crypto for goods or services

When Crypto Might Not Be Taxable

Profits may not be taxable if you can demonstrate you acquired the crypto for a purpose other than disposal — for example, as a long-term store of value with no intention to sell. However, this is a high bar to meet, and IRD will scrutinise such claims.

If you’re holding crypto as a genuine long-term asset with no disposal intention, seek professional advice to confirm your position.

How to Calculate Taxable Income

Your taxable income from crypto is:

Sale price - Cost base = Taxable profit (or deductible loss)

Cost Base

Your cost base includes:

• The purchase price in NZD at the time of acquisition
• Transaction fees (exchange fees, network fees)
• Any other costs directly related to acquiring the crypto

Valuation Method

You need a consistent method for matching purchases to sales:

• FIFO (First In, First Out): The first units purchased are treated as the first sold
• Weighted average cost: Average the cost of all units held

Choose one method and apply it consistently. IRD doesn’t prescribe a specific method but requires consistency.

Mining, Staking, and Airdrops

Activity	Tax treatment
Mining	Income at market value when received
Staking rewards	Income at market value when received
Airdrops	Income at market value when received (if related to existing holdings or activity)
DeFi yield	Income at market value when received

For miners, the costs of mining (electricity, hardware depreciation) may be deductible as business expenses if mining is conducted as a business.

Crypto-to-Crypto Trades

Swapping one cryptocurrency for another is a disposal event. You must calculate the gain or loss at the time of each trade, using the NZD market value of the crypto received.

Example: You swap 1 BTC (cost base $40,000) for 15 ETH (market value $45,000 total).

• Taxable gain: $45,000 - $40,000 = $5,000

GST and Crypto

Cryptocurrency is treated as a form of property for GST purposes. However, the supply of cryptocurrency is generally an exempt supply, meaning no GST is charged on buying or selling crypto.

Record-Keeping Requirements

IRD expects you to maintain detailed records of all crypto transactions:

• Date of each purchase and sale
• Quantity of crypto bought and sold
• NZD value at the time of each transaction
• Exchange and wallet records
• Transaction fees

Crypto portfolio tracking tools can help generate the reports you need for your tax return.

Reporting to IRD

Report crypto income in your IR3 tax return under the appropriate income category. If crypto trading is your main activity, it may be classified as business income.

Sources

• Cryptoassets — IRD
• Tax on property — IRD