Wednesday , October 5 2022

New Zealand government legalizes wage payments through bitcoin and other cryptocurrencies CryptoNews


The New Zealand authorities have released an official bulletin stating that the country's employers will be able to pay their workers' wages with bitcoin (BTC) and other cryptocurrencies.

The measure will take effect from September 1, the date on which New Zealand employers can choose to pay their wages using this method. These payments will generate taxes and the Department of Internal Revenue of that country (Inland Revenue Department or IRD) explained how they should be canceled.

According to the IRD, employers will be able to pay their workers through cryptocurrencies fulfilling three conditions: that the payment be for the services performed by the employee under an employment agreement, this is a fixed amount and this is a regular part of the employee's compensation.

The standard is taxable in its size and directly excludes self-employed workers or freelancers. Therefore, in order to receive payments in crypto currency, it should be used: "This decision applies only to employees and not to independent taxpayers", as read in the proposal published on 7 August.

He adds that the cryptocurrencies used for payment to employees should not be subject to a blocking period and should be easily convertible to fiat currencies. The standard will rule for the next three years and the signature of the director of Inland Revenue Department, Susan Price.

In the bulletin, the tax authority referred to bitcoin and other cryptocurrencies as "crypto-securities" (crypto securities), which "uses cryptography and blockchains technologies to regulate their generation and control transfers." Therefore, the proposal of the New Zealand authority mentions a significant variety of cryptocurrencies that can be used to pay a salary.

Among the cryptocurrencies that can be used are bitcoin, bitcoin money (BCH), bitcoin gold (BTG), litecoin (LTC) and ether (ETH), which are defined as cryptocurrencies. Filecoin (FIL) and fentacoin (DCN) are also included, as utility tokens.

The payments on cryptocurrency that this new New Zealand rule protects are established on the basis of deduction of the employee's gross salary, or as a reduction in the calculation of the employee's gross salary. This to pay the response tax.

By this measure, if an employee agrees to a gross payment of $ 100 in ragged coins and has a tax rate of 33%, the employer must make a payment of $ 33 to the IRD. In the meantime, the employee would receive the equivalent of $ 67 dollars in the agreed-upon crypto currency.

Because the rule also stipulates that payments must be made in crypto currency with high liquidity, employers are likely to need to choose between those with greater market capitalization and greater daily trading volume to pay the wages.

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