In December, Chainalysis reported that 400 million crypto wallets now have a positive (non-zero) balance. That’s a lot of crypto investors congratulating themselves on their investment decisions! But here’s a top tip for anyone planning to spend their rewards - every dollar of profit you make from crypto is taxed just like any other income. First things first - what is a ‘tax year’ and what does it have to do with my crypto? A tax year is a period that spans 12 months, the beginning and end of which don't always align with the calendar year (i.e. 1 Jan - 31 Dec). The current tax year in New Zealand is between 1 April 2024 and 31 March 2025 inclusive. All income that you received starting 1 April 2024 through 31 March 2025 is subject to income tax. This includes income from all of your crypto transactions, such as: Selling crypto at a profit. Swapping one crypto with another crypto, at a profit. Sending someone a crypto gift, where the value of that crypto gift has appreciated from the point at which you've bought it. Receiving income in crypto, from a business, staking or crypto mining. Spending crypto using a crypto credit card. After tallying up your income from crypto, the exact tax you owe will depend on your income tax bracket. Myth #1 - I can fly under the radar, right? In short: it’s a big, fat NO! Many regional tax authorities (including the IRD in New Zealand) have made it clear that income from crypto is subject to income tax. What’s more, this is often fully trackable by tax authorities. Koinly’s New Zealand crypto tax guide for 2025 is pretty clear on this fact, stating that “Yes, the Inland Revenue Department can track crypto as it can request data from crypto exchanges” - and yes, that includes international exchanges. Myth #2 - Ok, file my taxes - easy! Although this might ‘sound’ simple, it can be complex to manage when adjusting your portfolio. For example, you may want to temporarily move your Bitcoin into a stablecoin to wait out some market volatility and then buy back in again. Although you have not ‘sold out’ of crypto, the tax ticket is clipped with any gains and the question becomes (especially for higher income earners) whether it is worth 'trading' dips when this may create a 31-39% taxable event. Rules and regulations around crypto gains can vary significantly from one region to another, so it's crucial to familiarise yourself with the relevant legislation in your specific region to ensure you’re complying. In general, there are some common principles that apply wherever you’re trading… If you've made gains from your crypto ventures, you're obligated to pay taxes on those profits. On the flip side, if you've incurred losses, you may be able to offset them against taxes paid in other areas, such as PAYE on your salary. Most reputable exchanges will keep a record of all your transactions for you and you should be able to easily download them into a spreadsheet to accurately calculate your profits and losses for tax purposes. Different tax authorities accept different methods for calculating what your crypto profit might be and this can get quite complex when you have bought and sold multiple times. As with most things, a stitch in time can often save nine and getting professional help with your crypto tax upfront can often help you avoid landing in hot water with your tax authority. Crypto-specific tax platforms make it easy for you to calculate the taxes you owe from all your crypto transactions by calculating all your gains, income, and expenses. At tax time, simply download your tax report for your country, and you’re good to file! Myth #3 - Trading sounds like never ending tax headaches! While the tax office expects its share of your crypto profits, there are scenarios where you can relax a little. Generally, you don’t need to pay income tax on crypto you’re holding but haven’t sold or traded yet. This also applies when purchasing crypto using fiat currency. For stablecoins tied to an underlying currency there’s no volatility or price fluctuation linked to your transaction, meaning no taxable gains or losses. Likewise, if you’re simply holding onto your crypto without actively trading, tax implications typically only arise once you sell or otherwise dispose of your assets. (Can anyone say HODL for the win!) Similarly, transferring Bitcoin between your wallets won’t trigger any tax obligations. The bottom line As the crypto market continues to thrive and profits are tantalisingly within reach for many, it’s important to remember your tax responsibilities. Neglecting to report your earnings could land you in serious trouble with authorities. By understanding the tax rules in your region and consulting a professional when needed, you can keep your trading ventures both lucrative and fully compliant. In December, Chainalysis reported that 400 million crypto wallets now have a positive (non-zero) balance. That’s a lot of crypto investors congratulating themselves on their investment decisions! But here’s a top tip for anyone planning to spend their rewards - every dollar of profit you make from crypto is taxed just like any other income. In December, Chainalysis reported that 400 million crypto wallets now have a positive (non-zero) balance. That’s a lot of crypto investors congratulating themselves on their investment decisions! But here’s a top tip for anyone planning to spend their rewards - every dollar of profit you make from crypto is taxed just like any other income. In December, Chainalysis reported that 400 million crypto wallets now have a positive (non-zero) balance. That’s a lot of crypto investors congratulating themselves on their investment decisions! But here’s a top tip for anyone planning to spend their rewards - every dollar of profit you make from crypto is taxed just like any other income. reported reported First things first - what is a ‘tax year’ and what does it have to do with my crypto? First things first - what is a ‘tax year’ and what does it have to do with my crypto? A tax year is a period that spans 12 months, the beginning and end of which don't always align with the calendar year (i.e. 1 Jan - 31 Dec). The current tax year in New Zealand is between 1 April 2024 and 31 March 2025 inclusive. All income that you received starting 1 April 2024 through 31 March 2025 is subject to income tax. This includes income from all of your crypto transactions, such as: Selling crypto at a profit. Swapping one crypto with another crypto, at a profit. Sending someone a crypto gift, where the value of that crypto gift has appreciated from the point at which you've bought it. Receiving income in crypto, from a business, staking or crypto mining. Spending crypto using a crypto credit card. Selling crypto at a profit. Swapping one crypto with another crypto, at a profit. Sending someone a crypto gift, where the value of that crypto gift has appreciated from the point at which you've bought it. Receiving income in crypto, from a business, staking or crypto mining. Spending crypto using a crypto credit card. After tallying up your income from crypto, the exact tax you owe will depend on your income tax bracket. Myth #1 - I can fly under the radar, right? In short: it’s a big, fat NO! Many regional tax authorities (including the IRD in New Zealand) have made it clear that income from crypto is subject to income tax. What’s more, this is often fully trackable by tax authorities. Koinly’s New Zealand crypto tax guide for 2025 is pretty clear on this fact, stating that “Yes, the Inland Revenue Department can track crypto as it can request data from crypto exchanges” - and yes, that includes international exchanges. IRD IRD Myth #2 - Ok, file my taxes - easy! Although this might ‘sound’ simple, it can be complex to manage when adjusting your portfolio. For example, you may want to temporarily move your Bitcoin into a stablecoin to wait out some market volatility and then buy back in again. Although you have not ‘sold out’ of crypto, the tax ticket is clipped with any gains and the question becomes (especially for higher income earners) whether it is worth 'trading' dips when this may create a 31-39% taxable event. Rules and regulations around crypto gains can vary significantly from one region to another, so it's crucial to familiarise yourself with the relevant legislation in your specific region to ensure you’re complying. In general, there are some common principles that apply wherever you’re trading… If you've made gains from your crypto ventures, you're obligated to pay taxes on those profits. If you've made gains from your crypto ventures, you're obligated to pay taxes on those profits. On the flip side, if you've incurred losses, you may be able to offset them against taxes paid in other areas, such as PAYE on your salary. On the flip side, if you've incurred losses, you may be able to offset them against taxes paid in other areas, such as PAYE on your salary. Most reputable exchanges will keep a record of all your transactions for you and you should be able to easily download them into a spreadsheet to accurately calculate your profits and losses for tax purposes. Different tax authorities accept different methods for calculating what your crypto profit might be and this can get quite complex when you have bought and sold multiple times. As with most things, a stitch in time can often save nine and getting professional help with your crypto tax upfront can often help you avoid landing in hot water with your tax authority. Crypto-specific tax platforms make it easy for you to calculate the taxes you owe from all your crypto transactions by calculating all your gains, income, and expenses. At tax time, simply download your tax report for your country, and you’re good to file! Myth #3 - Trading sounds like never ending tax headaches! While the tax office expects its share of your crypto profits, there are scenarios where you can relax a little. Generally, you don’t need to pay income tax on crypto you’re holding but haven’t sold or traded yet. This also applies when purchasing crypto using fiat currency. For stablecoins tied to an underlying currency there’s no volatility or price fluctuation linked to your transaction, meaning no taxable gains or losses. Likewise, if you’re simply holding onto your crypto without actively trading, tax implications typically only arise once you sell or otherwise dispose of your assets. (Can anyone say HODL for the win!) Similarly, transferring Bitcoin between your wallets won’t trigger any tax obligations. The bottom line As the crypto market continues to thrive and profits are tantalisingly within reach for many, it’s important to remember your tax responsibilities. Neglecting to report your earnings could land you in serious trouble with authorities. By understanding the tax rules in your region and consulting a professional when needed, you can keep your trading ventures both lucrative and fully compliant.
