NZ crypto companies undergo probe by Inland Revenue

Accurate calculation of taxes can sometimes be challenging for the investors in the cryptocurrency industry. To better understand crypto-assets for taxation, the tax agency in New Zealand, Inland Revenue Department (IRD) has, however, requested that the crypto companies operating in the country should submit the personal information of their customers, including details of their digital currency holdings.

IRD requests crypto companies to submit customers’ details

A local news outlet, Radio New Zealand (RNZ), reported the development on Monday. The country’s tax agency asked the crypto companies to hand over information regarding the type of cryptocurrency assets held by its customers, as well as their value. The primary objective for such a request remains uncertain; however, the IRD did mention in a statement that it wants to enhance its understanding of cryptocurrency assets. 

The agency wrote:

IRD is requesting this information to enhance our understanding of the crypto asset environment in New Zealand so we can work out how best to help taxpayers meet their income tax obligations.

Responses from New Zealand crypto companies are that the request from IRD is quite too much, given that privacy is essential in the industry. Janine Grainger, the CEO of a local cryptocurrency exchange dubbed Easy Crypto, said:

“I guess [IRD] is just widening its net of the tax base, and crypto-assets are something that is definitely growing in popularity, and we’re seeing a huge increase in New Zealanders getting involved.” However, asking crypto companies to submit their customers’ personal information is “heartbreaking.”

Privacy is key

Grainger explained that privacy is very important for the cryptocurrency industry and that the need for privacy, freedom, and autonomy is one of the tenants of cryptocurrency. However, Easy Crypto, as well as other crypto-related companies, would need to comply with the request, as there is no legal backup to refuse to hand over the customers’ information, according to Grainger.

While many people might think ‘I have nothing to hide, therefore, what do I care?’ the point of privacy isn’t to aid people who have something to hide, it’s to ensure we have a fair, open and free society.