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New Zealand Legalizes Bitcoin Ownership: Set to Tax Bitcoin Payments

Bitcoin payments used for salaries and wages have been given legal recognition in New Zealand. Furthermore, Bitcoin has been assignedA the same status as property and will soon be subject to taxation, once the new resolutions proposed by the New Zealand Inland Revenue Department kick in on September 1, 2019.

Aside from Switzerland, New Zealand is the only country among the FX majors to have assigned Bitcoin a legal status, not just as a property but also as a means of paying salaries, wages as well as making payments for goods and services. The New Zealand Inland Revenue Department is drawing its inference from Section 91D of the Tax Administration Act 1994 of New Zealand. The new ruling also mandates all BTC payments to be made immediately available for conversion into fiat currency.

This ruling paves the way for the Kiwi government to start collecting taxes on all forms of employee and pension compensations. What is yet unclear about the ruling, is how the government intends to deal with the volatility situations on Bitcoin which has seen the asset fluctuate by hundreds of dollars in a matter of hours.

Technical Play for BTCUSD

Bitcoin continues to find support at the 50% Fibonacci retracement level (from the November 2017 swing high to the December 2018 swing low. The descending trend line which has capped upside movement beyond $12,000 is still intact. If $11,300 is breached to the downside, 10,600 and 9,840 will come into view.

On the flip side, a break above $12,200 will open up possibilities for a possible re-test of $13,000.