New Tax Rules On Crypto Trading

From 1 April 2026, the “off the radar” era of cryptocurrency ended with the Crypto-Asset Reporting Framework (CARF).

Local and global exchanges must now report your transaction data directly to Inland Revenue, who will share this with international tax authorities.

Taxing Your Profits

In New Zealand, crypto gains (and losses) are generally treated as taxable income/loss, not tax free capital gains. Because crypto doesn’t provide a “yield” (like rent), the IRD assumes it was bought with the dominant purpose of resale. Consequently, most traders are liable for income tax on realised gains at their personal marginal rate. 

Handling Losses

If your crypto activity is taxable, your losses are generally deductible.

• Offsetting income: Realised losses can often reduce your total taxable income, potentially leading to a tax refund.
• The realisation rule: You can only claim a loss once you actually sell or swap the asset – a “dip” in portfolio value doesn’t count unless you are transacting to such a high level you are actually in business as a “trader”, and can then treat the crypto as trading stock that is now worth less than costs.
• Evidence: Keep meticulous records, as IRD will scrutinise your original intent for buying.

The “Swap” Trap

Swapping one coin for another (e.g., Bitcoin for Ethereum) is viewed by IRD as a sale. You may owe tax on that trade even if you haven’t converted back to New Zealand dollars. 

Stay Ahead with RSM

If you want to understand what these changes mean for you, get in touch with the team at RSM to help you navigate your tax obligations and ensure you're prepared for the new reporting requirements. 

Contact Lloyd Kirby to learn more.