Companies based in New Zealand can now pay salaries in cryptocurrencies like bitcoin, according to a new ruling.
The New Zealand Inland Revenue announced on August 7 that companies which choose to pay their employee in cryptocurrencies can file for tax deduction under the existing scheme. The move verified bitcoin as a legal wager-payment method, same in the line of Visa, PayPal, MasterCard, or wire transfers.
As a part of the ruling, companies must pay employees only in those cryptocurrencies that can be pegged to at least one sovereign currency. They should also ensure that cryptocurrencies can be easily liquidated into another form of payment, such as cash.
The Inland Revenue also clarified that their new law bars self-employed personnels from accepting cryptocurrency as payments. The move would likely impact blockchain developers and cryptocurrency content marketers that typically accept native tokens as payments.
Despite a few shortcomings, cryptocurrency enthusiasts welcomed the Inland Revenue’s take on bitcoin. One user on Reddit said:
“Great, one more step towards full crypto integration around the world.”
Renowned market analyst Rhythm Trader said New Zealand gets bitcoin, adding that their move would inspire more countries to accept the cryptocurrency. Excerpts:
“We’re going to see more and more countries participate in the new financial revolution. Bitcoin adoption should be the next space race.”
A New Legal Framework for Bitcoin
The tax authority’s new ruling appeared amidst a time when regulators are finding it difficult to define bitcoin. Wellington’s Inland Revenue termed the cryptocurrency as property, stating that it cannot be money because it is not a legal tender.
However, the New Zealand taxman considers bitcoin as money, now making it available to be used to pay taxes and salaries.
Bitcoin surged by more than 200 percent this year after establishing a bottom near the $3,100 level. Reports suggest that investors are beginning to consider the cryptocurrency as a haven asset, especially against the ongoing US-China trade war, and an economic epidemic promised by Brexit this Halloween.