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Te manatoko kurutete whiti-rangi Mining cryptoassets

Cryptoassets
Cryptoassets
  • Cryptoassets for individuals
    • Buying and selling cryptoassets
    • Mining cryptoassets
      • Mining cryptoassets as a business
      • Mining cryptoassets for a profit-making scheme
      • Mining cryptoassets for ordinary income
      • Mining cryptoassets as a hobby
    • Cryptoassets and tax residence
    • Airdrops and Hard forks

Mining cryptoassets is a process that creates new blocks and achieves consensus (agreement) on the blocks to add to the blockchain. Different consensus models are possible, for example proof of work and proof of stake.

Miners can receive cryptoasset rewards in return for verifying additions to the blockchain digital ledger. The verifying process is a service that miners provide to the blockchain digital ledger.

A proof of work miner may choose to mine cryptoassets alone, or as part of a mining pool.

Some people choose to take part in proof of stake mining through a third party staking-as-a-service provider or a staking pool rather than staking on their own.

Mining cryptoassets and tax

In most cases, cryptoassets you get from mining (such as transaction fees and block rewards) are taxable. The mining service you provide will be subject to GST.

GST (goods and services tax)

However, as the service is provided to a blockchain digital ledger outside of New Zealand it will be zero rated.

Zero-rated supplies

The GST input on the costs that relate to your mining service can be claimed for GST purposes.

Claiming GST

You may also need to pay income tax on any profit you make if you later sell or exchange your mined cryptoassets. There are no GST implications for this subsequent sale of cryptoassets.

When you mine cryptoassets, you may have to pay tax because you:

  • are in the business of mining cryptoassets
  • carry on a profit-making scheme
  • earn ordinary income from providing mining services
  • mine cryptoassets for the purpose of disposal (to sell or exchange).

It’s important to consider which of the situations below applies to your mining activity.


Pages in this section
  • Mining cryptoassets as a business Check if we'd see your cryptoasset mining as a business and if you pay income tax on your crytpoasset rewards and profits.
  • Mining cryptoassets for a profit-making scheme Work out if you have a cryptoasset mining profit-making scheme and need to pay tax.
  • Mining cryptoassets for ordinary income Work out if you have ordinary income from providing cryptoasset mining services and need to pay tax.
  • Mining cryptoassets as a hobby Find out if you need to pay tax on cryptoassets you get from your mining activity.

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Last updated: 28 Apr 2021
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