New Zealand is moving forward with the implementation of the Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD).
This initiative, proposed by Revenue Minister Simon Watts, seeks to increase transparency in cryptocurrency transactions and ensure the proper taxation of crypto-related income.
The proposal was introduced as part of the “Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill” on August 26, 2024.
If approved, the new regulations would require crypto service providers based in New Zealand to begin collecting and reporting information on their users’ transactions starting April 1, 2026.
Under the proposed framework, reporting crypto-asset service providers (RCASPs) would be required to gather data on reportable users utilizing their platforms.
This information would then be submitted to Inland Revenue, New Zealand’s tax authority, by June 30, 2027.
The collected data would also be shared with relevant tax authorities in other jurisdictions by September 30, 2027.
The main objective of this initiative is to give tax authorities better oversight of income generated from cryptocurrency trading.
As the technology behind crypto assets, particularly cryptography, poses unique compliance challenges, tax officials currently do not have the same level of oversight as they do with traditional income sources.
Penalties for Non-Compliance
To enforce compliance, the proposal includes a system of penalties. RCASPs that fail to meet the new reporting requirements could be fined 300 New Zealand dollars (approximately $186) per instance of non-compliance, with a cap of 10,000 NZD ($6,200).
However, if service providers are found to have not exercised “reasonable care” in adhering to CARF requirements, they could face more severe fines ranging from 20,000 to 100,000 NZD ($12,000 to $62,000).
Individual users are also subject to these regulations. Those who fail to provide the necessary information for compliance could be fined 1,000 NZD ($621).
This move by New Zealand aligns with a growing global trend toward increased regulation and oversight of the cryptocurrency sector.
It follows earlier calls from Andrew Bayly, New Zealand’s Minister of Commerce and Consumer Affairs, for a significant overhaul in the nation’s regulation of digital assets and its approach to blockchain technology.
The implementation of CARF is part of a broader effort to modernize New Zealand’s handling of crypto assets.
Last month, the country’s tax authority announced its focus on crypto traders who have not declared their earnings from these activities in their tax returns.
As cryptocurrencies continue to gain popularity and become more integrated into the mainstream financial system, governments worldwide are working to effectively regulate and tax these digital assets.
New Zealand’s adoption of the OECD’s framework is a significant step toward establishing a more transparent and accountable crypto ecosystem within the country.
As the April 1, 2026 implementation date approaches, crypto businesses in New Zealand will need to prepare their systems and processes to comply with these new reporting requirements. Users of these services should also be aware of their obligations under the new framework and the potential penalties for non-compliance.
Source: blockonomi.com
