Crypto Assets
Due to the decentralised nature of the crypto, the common misconception is that crypto transactions enjoy anonymity and cannot be traced. In 2024 IRD has identified 227,000 unique cryptoasset users in New Zealand undertaking around 7 million transactions with a value of $7.8 billion. IRD has made it clear on a few occasions: that crypto investors are firmly on their radar.
With growing tools and international collaboration IRD has significantly enhanced its ability to monitor and enforce tax compliance in the digital asset space. With the adoption of the OECD’s Crypto Asset Reporting Framework (CARF) effective 1 January 2026 this capability will further be enhanced.
Most of the commonly used exchanges such as Coinbase, Binance, Easy Crypto and the like are subject to strict AML /KYC regulations. Consequently, the identity and trading history is linked to the identity of the respective accounts/ wallets.
Despite crypto being decentralized, blockchains are fully transparent. Every transaction is permanently recorded on a public ledger. Advanced analytics tools, allow the authorities to trace funds to personal wallets i.e. back to the respective individuals.
IRD Audit Activity is increasing across the board
What should you do if you have crypto?
Assuming that crypto holdings are anonymous could be an expensive tax strategy in the long run. If you hold crypto assets you should be thinking about your tax obligations and the risks of not declaring income from it.
As not all information is recorded in blockchain a good record keeping is imperative for supporting your tax position.
If you would like help reviewing you crypto position or responding to an IRD enquiry, or just understanding what your obligations are do get in touch.
May 2025
