Employees in New Zealand can now receive their salary in cryptocurrency, according to a bulletin published by the county’s tax agency Inland Revenue Department (IRD). There are some limitations, however – the payments of remuneration must be for a fixed amount and form “a regular part of the employee’s remuneration”. Self-employed taxpayers unfortunately cannot take advantage of the new rules.
The cryptocurrencies that are being paid must be directly convertible into fiat currency on exchanges. In addition to this, the crypto assets in question must either primarily function as currencies or have their value pegged to fiat currencies.
The bulletin mentions BTC, BCH, BTG and LTC as examples of cryptocurrencies that aim to serve as an alternative to fiat currency. However, it does also provide ETH as an example of a crypto asset that’s not purely designed as a currency but still satisfies the requirements:
“Some crypto-assets are designed with other functions in addition to use as a currency, but the currency purpose is still a significant one. Ether is a common example of this.”
Meanwhile, USDT and PAX are mentioned as examples of crypto assets that are pegged to fiat currencies.
The ruling will come into effect on September 1 this year and will apply for three years.
At this point, the markets are still very volatile even for the most established cryptocurrencies. Even though these assets have potential to appreciate substantially, taking a salary in such a volatile asset might not be the best idea for most people. Still, it is encouraging to see countries like New Zealand viewing cryptocurrencies as a legitimate form of payment.