Forex Trading Tax in New Zealand (2026)

When is a trading profit income in New Zealand?

Section CB 1(1) of the Income Tax Act 2007 says: “An amount that a person derives from a business is income of the person.” Inland Revenue’s income under ordinary tax rules page agrees: “Amounts earned from a business are income.” I quote the Act and IRD in their own words.

The Act’s second limb, section CB 3, says: “An amount that a person derives from carrying on or carrying out an undertaking or scheme entered into or devised for the purpose of making a profit is income of the person.” IRD defines a scheme as “a course of action, a series of steps, or an enterprise directed to a result”. Any intent of making a profit, IRD says, must be the dominant or main intent, and if it applies, any profits are only taxable from the time you start the scheme. IRD notes the limbs can overlap: “An amount can be income under more than 1 rule, but it is only taxed once.”

IRD’s guide IR295 on taxes and duties says: “New Zealand does not have a capital gains tax, but profits from selling some assets can be taxed in some circumstances.” The ordinary tax rules page carries IRD’s recommendation: “If you’re unsure we recommend you speak to a tax professional.”

How does Inland Revenue decide if trading is a business?

On its income under ordinary tax rules page, IRD sets out what it considers when “looking to see whether the activity is a business”, and I reproduce the list as IRD gives it:

• the intent to make a profit
• the time, money and effort you have put into the activity
• the nature of the activity, for example selling or providing goods or services on a regular basis
• whether records are kept to monitor the financial status of the activity
• the amount of money earned from the activity
• “the scale of operations, the volume of transactions, and the pattern of activity”
• if the activity is run in a similar way to most businesses in the same trade
• the length of time that has been spent on doing the activity

This page does not decide where your own trading sits against IRD’s list. I link the guide to how to trade forex in New Zealand for the mechanics of the market, which are covered there separately.

What are the financial arrangements rules?

No Inland Revenue consumer guidance page or guide our team read on 29 October 2026 addresses an individual’s forex or CFD trading, and none says whether a forex contract or a CFD is a financial arrangement. IRD’s “Regulatory Impact Statement: Lowering compliance and cashflow costs for foreign currency financial arrangements”, finalised on 12 August 2026, sought a decision from Cabinet; the statement lacks legal force, and the “elected functional currency” rule it considers is a proposal, not law. Paragraph 29(b) says “Any taxpayer who carries on currency trading activities, or who has a regular pattern of buying and selling foreign currencies, would be prevented from using the rules”. Lettered item (c) of the same paragraph adds that taxpayers “cannot elect to use the elected functional currency rules in respect of derivative instruments, such as forward contracts, swaps, options, contracts for difference”. Whether a forex contract or a CFD is a financial arrangement is a question I leave open, and I quote Inland Revenue’s financial arrangements rules page for what it says.

From the 2025-26 and later income years, IRD says, a cash basis person is a person who either has income and expenditure from all financial arrangements on an accrual basis under NZ$200,000, or has total financial assets and liabilities less than NZ$2 million. Taxpayers who are cash basis persons, IRD says, need not use a spreading method and can report income or expenses on a cash basis, though they still usually must do the BPA. The BPA, base price adjustment, is required: “when a financial arrangement ends, you must do a BPA whether or not you’re a cash basis person”. If the calculation is positive, this is income; if negative, the deductibility depends on the normal rules, IRD says.

IRD notes “large currency fluctuations or smaller fluctuations on large amounts may give rise to unexpected income where the financial arrangement is not in New Zealand dollars”. The rules do not apply to excepted financial arrangements; IRD’s examples include shares, variable principal debt instruments such as a foreign-currency overdraft or current account where the balance does not exceed NZ$100,000 at any time in a year (except for companies), and cryptoassets (except those economically equivalent to debt arrangements). IRD adds: “You can, however, choose for the rules to apply.” The rules “usually do not apply to non-resident taxpayers and transitional tax residents”, IRD says.

How is overseas currency converted for tax?

Inland Revenue says a New Zealand tax resident needs to pay tax in New Zealand on worldwide income, even if they did not bring it into this country. IRD says you need to convert overseas currency to New Zealand dollars to work out your income tax and GST. Generally, you can choose how overseas currency is converted, with some exceptions; where the financial arrangements rules apply, the methods and rates specified for each type of arrangement and transaction must be used. IRD also says to use the same exchange rate sources and methods consistently over time.

From Inland Revenue’s overseas income page, I take the filing rule: you need to file an IR3 at the end of every tax year you receive income from overseas, and complete the Overseas income summary (IR1261) with the breakdown of income and tax credits. Its examples are interest, rent, salary and wages, and pensions; trading profits through an overseas broker are not named.

When is the IR3 due and who pays provisional tax?

I link Inland Revenue’s IR3 page for the filing rules. IRD says you need to file a return if you received more than NZ$200 (before tax) in income it has not been told about, even if only for part of the tax year. The tax year runs from 1 April to 31 March, and the return is due by 7 July unless you have a tax agent or an extension of time. You can apply for an extension of time to file later. A return that cannot be completed on time needs one, IRD says, otherwise it may charge a late filing penalty.

IRD says provisional tax is paid in instalments during the year instead of a lump sum at the end, and applies if you had to pay more than NZ$5,000 tax at the end of the year from the last return, payable the following year after the return. A person who is not a provisional taxpayer but expects final income tax above that same amount may choose to be one, IRD says. Inland Revenue’s tax rates for individuals page says New Zealand has progressive tax rates that increase as income increases.

What records does Inland Revenue say to keep?

IRD’s record-keeping pages are written for businesses. On Inland Revenue’s record keeping page, IRD says to keep all records, including those in electronic form, for at least 7 tax years, and that “Your records must be in English or Māori, unless you get approval from us to use another language.” Its records of income and expenses page adds: “You must keep records of all cash and electronic sales and purchases for 7 years.”

The Financial Markets Authority (FMA) list of licensed derivatives issuers is on our guide to FMA-regulated forex brokers in New Zealand. I leave licensing to that page and keep this page on tax.