More New Zealand businesses are using digital currencies like Bitcoin, Ethereum, and stablecoins to pay suppliers, receive payments, or even hold as assets. While this opens up exciting opportunities, it also brings tax responsibilities that cannot be ignored. In 2025, cryptocurrency is firmly on the radar of the Inland Revenue, and clear rules apply to how it is taxed.
This guide explains the essentials of cryptocurrency tax in NZ in plain language. You will find out what activities are taxable, how to keep accurate records, and the steps to stay compliant. The goal is to give you confidence in handling crypto within your business… without the confusion.
How New Zealand Classifies Cryptocurrency
New Zealand does not consider crypto like real money, such as dollars or coins. Instead, it treats crypto as property for tax purposes. That means you own it like a toy you can trade, sell or collect. This matters because when you do anything with it in your business, tax rules can apply.
Here are two simple ways to understand the difference:
- Personal use: When you use crypto for your own stuff, like buying snacks or games, it is personal. That usually does not go through the tax system.
- Business use: When your business accepts crypto as payment, sells crypto to get dollars, or trades one coin for another… that is business activity. That means tax rules come into play. For example, if your online shop sells a t-shirt and someone pays in Bitcoin, you need to count that as income for tax.
Taxable Events for Businesses
Let us first look at what makes a tax event happen for businesses dealing in crypto.
- Selling crypto for NZD or fiat: When you sell crypto and get dollars, any profit is income and must be reported.
- Swapping one cryptocurrency for another: If you trade coin A for coin B, it counts as selling coin A. If you made a profit, that is taxable.
- Using crypto to pay for goods or services: If your business pays with crypto, it is like selling that crypto. You need to use the NZD value at that moment.
- Receiving crypto as payment: When a customer pays you in crypto, that is barter. You record the NZD value and treat it as income.
- Staking, mining, yield farming income: Any crypto earned through mining or other blockchain rewards is income at the value when you receive it.
Income Tax Rules
Let’s break down how income tax works for crypto in your business.
Valuing Crypto Income
Always convert your crypto to NZD based on the value at the exact time of the transaction. This gives IRD the correct figure for your taxes and avoids confusion later.
Keep in mind that the price can change quickly. That means if you sell or receive crypto at 2 pm, you must use that day’s value at 2 pm, even if you check later and see a different number.
Trading Stock vs Capital Asset
If your business buys and sells crypto regularly to make a profit, that crypto is like trading stock. You treat gains as business income. Holding crypto hoping it goes up later may feel like an investment, but IRD usually sees it as trading, so tax accounting applies when you sell.
Deductible Expenses
You can reduce your taxable income by including costs like mining gear, electricity, software fees, and transaction fees. These are normal business costs that lower how much tax you pay.
Losses and How to Claim Them
If you lose money when selling crypto, you can often use that loss to offset other business income. This helps reduce your overall tax. Just keep clear records so you can prove the loss.
GST (Goods and Services Tax) and Crypto
GST is another layer to watch out for when dealing with crypto.
If your business is registered for GST, any sale for crypto still needs GST if the good or service is taxable. The same rules apply as if you were paid in dollars.
A few things you need to remember:
- Always calculate GST on the NZD value of crypto at the time of sale. If someone pays in crypto, convert it to NZD and then add GST to that value.
- Record everything clearly. It is easy to forget or miscalculate when using crypto. Keep neat records of how much crypto, what type, NZD value, and GST charged.
- Avoid common mistakes like missing GST on crypto sales or using the wrong exchange rate. Those mistakes can lead to trouble or needing extra help from a good accounting firm.
Record Keeping Requirements
Let us talk about why keeping records is super important.
What to Record
You should log every crypto transaction with details like date, type of crypto, amount, NZD value, and purpose (sale, purchase, reward, etc.). Having this info means you can always explain your numbers to the IRD.
You can use bookkeeping services or special software that automatically tracks crypto values and lets you look back whenever needed.
How Long to Keep Records
In New Zealand, you must keep tax records for at least seven years. That means every invoice, conversion, and receipt needs to be saved. This helps if IRD ever asks for proof or if you need to check older records to fill out your income tax return.
Special Considerations for Different Business Models
Different types of businesses will face different crypto tax situations.
- E-commerce (selling products): If your online shop accepts crypto, record each sale and deal with GST and income just as you would with dollars.
- Service providers (freelancers and consultants): When clients pay in crypto, convert the value to NZD and include it in your business income.
- Crypto-native businesses (exchanges, DeFi platforms): These often have large numbers of transactions and rewards. You may want to use tax pooling to manage when you pay tax on frequent trades or rewards.
- Investors or traders seen as business: If trading crypto is your main business, gains and losses are business income. This makes it smart to get advice on tax consulting to keep things correct.
How to Report Crypto to Inland Revenue (IRD)
GST is another layer to watch out for when dealing with crypto.
If your business is registered for GST, any sale for crypto still needs GST if the good or service is taxable. The same rules apply as if you were paid in dollars.
A few things you need to remember:
- Always calculate GST on the NZD value of crypto at the time of sale. If someone pays in crypto, convert it to NZD and then add GST to that value.
- Record everything clearly. It is easy to forget or miscalculate when using crypto. Keep neat records of how much crypto, what type, NZD value, and GST charged.
- Avoid common mistakes like missing GST on crypto sales or using the wrong exchange rate. Those mistakes can lead to trouble or needing extra help from a good accounting firm.
Record Keeping Requirements
Let us talk about why keeping records is super important.
What to Record
You should log every crypto transaction with details like date, type of crypto, amount, NZD value, and purpose (sale, purchase, reward, etc.). Having this info means you can always explain your numbers to the IRD.
You can use bookkeeping services or special software that automatically tracks crypto values and lets you look back whenever needed.
How Long to Keep Records
In New Zealand, you must keep tax records for at least seven years. That means every invoice, conversion, and receipt needs to be saved. This helps if IRD ever asks for proof or if you need to check older records to fill out your income tax return.
Special Considerations for Different Business Models
Different types of businesses will face different crypto tax situations
- E-commerce (selling products): If your online shop accepts crypto, record each sale and deal with GST and income just as you would with dollars.
- Service providers (freelancers and consultants): When clients pay in crypto, convert the value to NZD and include it in your business income.
- Crypto-native businesses (exchanges, DeFi platforms): These often have large numbers of transactions and rewards. You may want to use tax pooling to manage when you pay tax on frequent trades or rewards.
- Investors or traders seen as business: If trading crypto is your main business, gains and losses are business income. This makes it smart to get advice on tax consulting to keep things correct.
How to Report Crypto to Inland Revenue (IRD)
Here is how to make sure IRD knows what is happening.
Which Forms to Use
If you run a business, include your crypto income in the right sections of your business tax return. Freelancers may add extra details to their personal returns.
It is easier if you use an accounting firm or tax agent to make sure you fill in forms correctly.
Approved Valuation Methods
IRD expects you to use the NZD value at the time of each transaction. Use a reliable exchange or tool to track this accurately.
Never guess or estimate values. If IRD audits you, this gives you confidence.
Deadlines for Filing and Payment
Your tax year runs from 1 April to 31 March. If you do your return yourself, file soon after year-end. If you use an agent, they may have different deadlines. It is best to check with them to avoid late penalties or arrange a tax audit.
Compliance Tips and Common Pitfalls
Staying compliant protects your business.
- Report everything accurately: Underreporting crypto income, or forgetting a transaction, can lead to penalties. Be honest and clear in your reporting.
- Watch for price swings: Crypto values move fast. Make sure you use the correct value at the right time to avoid mistakes.
- Be audit-ready: If IRD wants to check your records, having everything saved and organised will make the tax audit process far easier.
Conclusion
You now have a clear, friendly guide to how cryptocurrency tax works for New Zealand businesses in 2025. It may seem tricky, but with solid record keeping, accurate values, and basic tax checks, you will manage just fine. If you need help, PAS can give you advice tailored to your business… whether it is help with tax returns or navigating audits.
Let PAS support you with expert guidance on accounting and tax matters. Reach out to them and make your crypto journey smoother and sure-footed.
Frequently Asked Questions
Do I need to pay tax if I just hold crypto and do not trade?
No, holding crypto alone is not a taxable event. Tax matters when you sell, use, or earn from it.
Can I deduct crypto-related expenses from my income?
Yes. You can deduct costs like mining gear, transaction or exchange fees, and software if they are for business use.
How do I figure out the NZD value of crypto for tax?
Use the price on the date and time you did the transaction. Document that so you have proof for IRD.
What if I get crypto paid for work I did?
Treat it like money. Convert it to NZD at the time you receive it, and include it as income in your return.
How long must I keep crypto tax records?
For at least seven years. That includes all invoices, exchange records, and associated costs.
