NZ Forex Tax 101: How Your Forex Profits Are Taxed in 2026

The short version

• NZ forex profits are ordinary income, not capital gains.
• Every trade gets converted to NZD at the RBNZ mid-rate on its close date.
• NZ marginal rates (10.5%–39%) apply to your combined income.
• Most trading costs are deductible — brokerage, platform fees, data, VPS.
• Losses carry forward indefinitely.
• Provisional tax starts once your prior-year RIT tops $5,000.

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I've had this conversation with other NZ forex traders more times than I can count: "I've got my whole MT4 statement in a spreadsheet — I just have no idea how to turn it into what IRD actually wants."

I lived that exact problem. I traded forex on MetaTrader 4 for years, and every April I'd sit in front of a wall of USD trade data with no clue how to convert it into a proper NZ return. This is the guide I wish someone had handed me back then — no US framing, no capital gains, no IRS.

Why NZ is different

Most countries with a big retail forex scene treat trading profits as capital gains. The UK has a CGT rate, Australia gives you a discount for holding over a year, the US runs it through Schedule D.

New Zealand doesn't have a capital gains tax. Here, active trading profit is just ordinary income — taxed the same as your salary. In some ways that's simpler, but it's exactly why a US-built tool gets your numbers wrong. When Koinly or Tradervue "calculates your tax," it's solving a different country's problem.

How it actually works, step by step

1. Are you "in the business of trading"?

For most active forex traders, yes. You're treated as trading for profit if you trade with the intention of making money, follow some kind of system, and do it regularly. If you're on MT4/MT5 placing trades through the month, that's you. Claiming "passive investor" status for active forex trading is very hard to stand up — assume your profits are taxable income.

2. Work out your net P&L

NZ's tax year runs 1 April to 31 March, so this filing covers trades closed between 1 April 2025 and 31 March 2026.

Add up your gains and losses across the year — if you made money on EUR/USD but gave some back on gold, the loss offsets the gain and you're taxed on the net. Closed trades only; open positions at year end are handled separately (see the Base Price Adjustment note below).

3. Convert everything to NZD

This is the step that trips up almost everyone. Each closed trade has to be converted to NZD at the RBNZ mid-rate for the day it closed — not your broker's rate, not Google, not XE, not a monthly average. The Reserve Bank's published rate, for that specific date.

For a USD MT4 account, that means taking each trade's USD P&L and converting it at the RBNZ mid-rate for that trade's close date. The rate moves every day, so two identical +US$1,000 trades three months apart become different NZD figures. Here's what a slice of a real year looks like:

| Close date | Result (USD) | RBNZ rate (NZD per US$1) | Result (NZD) |

|---|---:|---:|---:|

| 12 May 2025 | +2,000 | 1.68 | +3,360 |

| 3 Jul 2025 | −800 | 1.65 | −1,320 |

| 19 Sep 2025 | +4,500 | 1.70 | +7,650 |

| 8 Dec 2025 | +1,200 | 1.70 | +2,040 |

| 22 Jan 2026 | −1,500 | 1.62 | −2,430 |

| 4 Mar 2026 | +5,000 | 1.74 | +8,700 |

| Net for the year | | | +18,000 |

Notice the two winning +US$1,000-ish trades in December and September convert at different rates because the dollar moved — you can't just take your account's USD profit and apply one rate at the end. It's a separate lookup per trade. RBNZ keeps historical rates online going back decades, but doing hundreds of them by hand is the part that eats a weekend. TradeLog NZ fetches and caches the right-date rate for every trade automatically.

4. Take off your costs

Deduct the genuine costs of trading before you calculate tax:

Fully deductible: broker commissions (where separately charged), platform subscriptions (MT4/MT5, TradingView, Bloomberg), VPS for an EA or automated strategy, data feeds, trading-specific education, and accountant fees for your trading return.

Partly deductible: home office — the share of rent/mortgage interest, power and internet that matches the floor area you trade from.

Note that for a typical spread-based broker, the spread is already baked into your P&L — it's reduced your profit on each trade, so you don't deduct it again.

5. Apply the marginal rates

This is where forex tax works exactly like your normal income tax — because it is your normal income. Add your net trading income to everything else (salary, interest, rental) and run the brackets:

| Income | Rate |

|---|---|

| $0 – $15,600 | 10.5% |

| $15,601 – $53,500 | 17.5% |

| $53,501 – $78,100 | 30% |

| $78,101 – $180,000 | 33% |

| $180,001+ | 39% |

Each band only taxes the income inside it.

Example. Take that $18,000 net forex profit from the table above, on top of a $55,000 salary — total taxable income $73,000:

($15,600 × 10.5%) + ($37,900 × 17.5%) + ($19,500 × 30%) = $14,120.50.

Of that bill, the forex profit sits in the 30% band, so it's added roughly $5,400 of tax you'll need to have put aside — there's no PAYE on trading income.

Losses carry forward — don't waste them

A net trading loss in any year carries forward indefinitely and reduces your taxable income in a future profitable year. No time limit — a loss from 2020–21 can still cut your 2025–26 bill. It's one of the genuine upsides of the NZ system, but only if you've recorded the loss and keep applying it. TradeLog NZ runs a carry-forward ledger automatically; if you're on a spreadsheet, you have to track it yourself every year.

Provisional tax

Forex income has no tax withheld at source, so if your Residual Income Tax last year topped $5,000, you're into provisional tax — three instalments:

| Instalment | Date |

|---|---|

| First | 28 August 2025 |

| Second | 15 January 2026 |

| Third | 7 May 2026 |

Standard method: each instalment = (prior year RIT × 1.05) ÷ 3. Underpay and IRD adds use-of-money interest from the due date — the rate moves, so check the current one at ird.govt.nz. Not catastrophic, but easy to avoid.

Open positions at year end: the Base Price Adjustment

NZ's financial arrangements rules include a Base Price Adjustment — a final wash-up when a financial arrangement ends (i.e. when a trade closes).

The good news for most retail traders: if you're a cash basis person, you do not have to do a BPA on positions still open at 31 March. You recognise P&L when each trade closes, full stop. You qualify as a cash basis person if your income and expenditure from financial arrangements stays under $200,000 a year, or your total financial assets and liabilities sit under $2 million — which covers most retail traders.

If you're above those thresholds, you're a non-cash-basis person and have to use accrual treatment, including a year-end wash-up on open positions. That's the point to get an accountant who knows the FA rules — worth it if you trade at scale or hold large positions over year end.

Filing on your IR3

Forex income goes on your IR3 — under self-employment income if trading is your main thing, or other income if you've also got a salary. You report net profit after deductible expenses. You don't attach your trade log or broker statements, but keep them for seven years in case IRD asks. An accountant can file for you and get you an extension to March of the following year.

ACC levy

If IRD treats you as self-employed (most active full-time traders), you also pay the ACC earner levy: for 2025–26 that's 1.67% on the first $152,790 of self-employment income — so $835 on $50,000 of trading income. It's on top of your income tax and TradeLog NZ folds it into the estimate.

GST

Forex P&L is GST-exempt — it's a financial service. The only time GST enters the picture is if you've got separate GST-liable income (courses, signal subscriptions, consulting) that crosses $60,000 of turnover in any 12 months. For pure trading income, GST isn't relevant.

A quick word on classification

IRD looks at whether you're a business trader or a passive investor, and it changes things like ACC and GST. The signals that point to "business" are high trade frequency, trading as your main income, long hours, multiple instruments, systematic strategies or EAs, leverage, and a long track record. Most active MT4 traders land squarely in business-trader territory — which is fine, it just means declaring correctly. (More in the business vs passive trader guide.)

Getting it done before 7 July

If you're staring down the deadline with a pile of MT4 exports:

1. Export your trade history (1 April 2025 – 31 March 2026)
2. Import it into TradeLog NZ — RBNZ rates applied automatically
3. Add your deductible expenses
4. Review the tax estimate (Pro includes provisional tracking)
5. Export the summary for your accountant, or use the figures to file the IR3 yourself

Imported, it's about a 30–60 minute job. The manual alternative — an RBNZ lookup for every trade — can eat days.

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This is general information, not tax advice. Everyone's situation differs and the rules change. Talk to a qualified NZ accountant before filing. TradeLog NZ takes no responsibility for errors in your return.

Links: IRD on trading income | RBNZ exchange rates | TradeLog NZ