New Zealand’s Revenue Minister, Simon Watts, made an announcement that has caused a storm in the crypto community.

The proposal to incorporate the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF) into national law has significant implications for crypto service providers and users alike. This move sets out to ensure transparency in crypto transactions and is scheduled to come into effect on April 1, 2026.

Under the new framework, crypto service providers in New Zealand will be mandated to collect transaction information from reportable users and submit it to the Inland Revenue by June 30, 2027.

The gathered data will then be shared with relevant tax authorities globally by September 30, 2027, with the intention of ensuring proper taxation of crypto-derived profits.

The proposal also outlines the consequences of non-compliance, with fines of $300 per instance for service providers and penalties for service providers potentially reaching between $12,000 and $62,000. Users who fail to provide the necessary information could face fines of up to $621.

This legislative move highlights New Zealand’s commitment to enhancing transparency and ensuring that crypto transactions are properly taxed in line with international standards.

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Minister Simon Watts has also proposed the integration of the OECD’s Crypto-Asset Reporting Framework (CARF) and updates to the Common Reporting Standard into New Zealand law through the Taxation  Bill. These proposed amendments are scheduled to become effective on April 1, 2026.

With the proposed penalty of $300 per instance for non-compliance by service providers and a $1,000 penalty for users who fail to share required information about themselves or a related person, the implications of this move are broad.

It’s worth noting that the technology behind crypto assets, particularly cryptography, presents unique compliance challenges for tax authorities. As a result, tax officials do not have the same level of oversight over crypto-asset income as they do with income from traditional sources.

This development comes as part of New Zealand’s broader move towards imposing stricter oversight on crypto activities, amid increasing calls for regulatory changes.

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Earlier this year, Andrew Bayly, New Zealand’s Minister of Commerce and Consumer Affairs, advocated for significant regulatory changes in how the nation approaches digital assets and blockchain technology.

New Zealand’s tax authority has also recently announced its focus on crypto traders who have failed to declare their earnings from these activities in their tax returns.

The proposal to incorporate the OECD’s Crypto-Asset Reporting Framework into New Zealand’s national law signifies a significant step towards enhancing the transparency and taxation of crypto transactions.

It also demonstrates New Zealand’s resolve to keep pace with international standards and effectively regulate the growing crypto landscape. As the crypto industry continues to evolve, such legislative measures will likely play a crucial role in shaping its future trajectory.