Cryptocurrency is taxable in New Zealand. IRD has issued clear guidance on how crypto assets are taxed, and non-compliance is increasingly visible as exchanges are required to report customer data. Whether you hold Bitcoin, Ethereum, or trade altcoins, you need to understand when tax applies and how to calculate it.
IRD treats cryptocurrency as property, not currency. Tax applies when you dispose of crypto — selling for NZD, swapping one crypto for another, using crypto to buy goods or services, or receiving crypto as income. The gain or loss is calculated in NZD at the time of the disposal. There is no blanket capital gains exemption for crypto in NZ — most disposals result in taxable income at your marginal rate.
How IRD Treats Cryptocurrency
IRD’s 2019 guidance (IS 09/01 updated) clarifies that:
- Cryptocurrency is not currency for NZ tax purposes — it is a form of property
- Most crypto activity is on revenue account — gains are income, losses are deductible
- Crypto received as payment (mining, staking, salary) is taxable as income when received, at market value
- Swapping one cryptocurrency for another is a disposal event — it is treated as selling one asset and buying another
Taxable Crypto Events
| Event | Taxable? | Notes |
|---|---|---|
| Selling crypto for NZD | Yes | Gain = sale price − cost |
| Swapping crypto for another crypto | Yes | Each swap is a disposal at market value |
| Using crypto to buy goods or services | Yes | Treated as disposal at value of goods/services |
| Receiving crypto as employment income | Yes | Taxed as salary at market value on receipt |
| Mining rewards received | Yes | Income at market value when received |
| Staking rewards received | Yes | Income at market value when received |
| Airdrop received | Likely yes | Income at market value if received in exchange for something |
| Holding crypto (no disposal) | No | No tax event — unrealised gains not taxed |
| Transferring crypto between your own wallets | No | No disposal; no tax event |
| Gifting crypto | Yes | Treated as disposal at market value |
Calculating Your Taxable Gain or Loss
For each disposal:
Gain or loss = Proceeds (in NZD) − Cost base (in NZD)
Proceeds: The NZD value of what you received — whether NZD itself, the value of the crypto you swapped into, or the value of goods/services purchased.
Cost base: What you originally paid for the crypto disposed of, in NZD. If you purchased at different times (FIFO or weighted average), use the appropriate method consistently.
Example:
- Bought 0.5 BTC for $15,000 NZD
- Sold 0.5 BTC for $22,000 NZD
- Taxable gain: $22,000 − $15,000 = $7,000 — added to your income, taxed at marginal rate
Example (swap):
- Swapped 1 ETH (cost: $4,000 NZD) for 10 SOL
- At time of swap, 10 SOL worth $5,500 NZD
- Disposal of ETH: proceeds $5,500, cost $4,000, gain $1,500 taxable
- New cost base of 10 SOL: $5,500 NZD (market value at acquisition)
Inventory Methods (FIFO, Weighted Average)
If you have bought the same cryptocurrency at multiple price points, you need a method for calculating the cost of the portion you sold:
- FIFO (First In, First Out): The first crypto you bought is treated as the first sold. Common and accepted by IRD.
- Weighted Average Cost: Average cost across all purchases. Also acceptable.
- Specific Identification: You identify which specific units you are selling. Requires detailed records.
Choose a method and apply it consistently. Switching methods requires disclosure to IRD.
Crypto as Income: Mining and Staking
If you earn cryptocurrency through mining, staking, or as payment for goods/services, it is income at the point of receipt — not just when you sell it.
Mining: The NZD value of each coin mined is income when the coin is received. The value also becomes your cost base for future disposal calculations.
Staking rewards: Same treatment — income at market value when received. Your staking rewards have a cost base of that value for future disposals.
Practical issue: For frequent staking rewards, tracking hundreds of small income events is administratively intensive. Consider using a crypto tax tool (Koinly, CoinTracker, Taxoshi) that integrates with exchanges and wallets.
Losses on Crypto
If you dispose of crypto for less than you paid (a loss), the loss is generally deductible against other income — because crypto is treated as revenue account property.
Example:
- Bought 2 ETH for $8,000 NZD
- Sold for $5,500 NZD
- Loss: $2,500 — deductible against wages, rental income, or other income
This is a meaningful benefit — NZ’s treatment of crypto as revenue account property means losses can offset other income, unlike in some countries where crypto losses are only offsetable against capital gains.
Record Keeping
You must keep records of every transaction for 7 years:
- Date and time
- Amount in the cryptocurrency (units)
- NZD value at the time of transaction
- Exchange rate used (and source)
- Description of the transaction (buy, sell, swap, mining reward, etc.)
- Wallet addresses or exchange used
Most exchanges (Easy Crypto, Independent Reserve, Binance, Coinbase) provide downloadable transaction history. Export this data and convert to NZD values using historical rates.
Recommended crypto tax tools:
- Koinly — integrates with NZ exchanges, auto-calculates tax
- Taxoshi — NZ-specific tool designed for IRD reporting
- CoinTracker — global tool, works for NZ
Filing Crypto Income on Your IR3
Declare crypto income and gains in the other income section of your IR3. Include:
- Total income from crypto (mining, staking, employment payment in crypto)
- Net gain from disposals (total gains minus total losses)
If you had a complex year (many trades, multiple exchanges, staking), consider using a crypto tax tool to generate an accurate summary, then transfer the totals to your IR3.
Frequently Asked Questions
Do I have to pay tax if I just hold Bitcoin and don’t sell?
No. Unrealised gains (holding crypto that has appreciated in value) are not taxable. Tax only applies on disposal events.
What if I forgot to declare crypto income in previous years?
Voluntarily disclose to IRD as soon as possible. IRD has a voluntary disclosure programme that reduces penalties for taxpayers who come forward before being audited. The longer you wait, the worse the outcome if IRD finds it first.
I made a large crypto gain in 2025. How much do I owe?
Add the gain to your other income and calculate tax at your marginal rate. If the gain pushed your total income above $70,000 or $180,000, the portion above those thresholds is taxed at 33% or 39%. Use our NZ Income Tax Calculator for an estimate.
Is DeFi (decentralised finance) activity taxed?
Yes — IRD’s general principles apply. Providing liquidity (receiving LP tokens is a disposal of the original tokens), yield farming (rewards are income when received), and NFT trading are all potentially taxable events. This is a complex and evolving area — seek professional advice for significant DeFi activity.