New Zealand legalises salaries paid in cryptocurrencies

New Zealand has become the first country legally to back companies that are paying employees in cryptocurrencies, in a move that brings the oft-maligned asset class in line with mainstream forms of payment.

Cryptocurrencies are largely unregulated, digital currencies that enable users to send money online without being tracked.

The ruling by New Zealand’s tax authority allows salaries and wages to be paid in cryptocurrencies such as bitcoin from September 1, as long as the payments are in regular, fixed amounts. The digital currency of choice must also be pegged to at least one regular currency and must be able to be converted directly into a standard form of payment.

The ruling, which was outlined by New Zealand’s Inland Revenue in a bulletin dated August 7, excludes self-employed taxpayers from earning incomes in cryptocurrencies. Companies that choose to pay their employees in crypto will be able to deduct tax under New Zealand’s pay as you earn income tax scheme.

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