Bitcoin Trading - Business/Regulation advice sought

[Thor]

Are other currencies legal tender? Answer that question.

Can you go to Pick n Pay with your dollars and shop?

You'll go to jail if you tried that.

 

[Thor]

my god you're confused.

Legal tender has *nothing* to do with whether something is taxable. It's not even the right bloody act:

Legal tender > South African Reserve Bank Act
Tax > Income Tax Act

Credit cards also aren't legal tender yet companies pay taxes on the money the receive via them.

And no I don't need to tweet them idiotic question because its in the income tax act as per above which carries way more weight than anything SARS staff says. Even if it wasn't it's basic common sense...you can't bypass the entire SA tax system by accepting payment in something other than cash.

Bitcoin is not taxable in South Africa.

 

[AchmatK]

Bitcoin is not taxable in South Africa.

Bitcoin is taxable end of story.

Stick to what you know and not tax advice.

The income tax act deals with tax and where value changes hands, irrespective what vehicle the value is in, there are tax implications.

We could move to a completely barter economy without any currency and SARS would still get its cut using the current income tax act.

Currencies simply makes transacting simpler.

 

[Thor]

Bitcoin is taxable end of story.

Stick to what you know and not tax advice.

The income tax act deals with tax and where value changes hands, irrespective what vehicle the value is in, there are tax implications.

We could move to a completely barter economy without any currency and SARS would still get its cut using the current income tax act.

Currencies simply makes transacting simpler.

No its not.

I've posted numerous credible sources. Please back up your opinion.

 

[AchmatK]

No its not.

I've posted numerous credible sources. Please back up your opinion.

Go read the income tax act.


No point in arguing with you in this as you clearly know every part of the income tax act.

You sound like someone that will go from one tax opinion to the next until you get one that works in your favour even if you have to pay for that opinion and that opinion is wrong.

Tax does not only apply to currency transactions.

 

[User4456]

It seems to me that Bitcoin is not directly taxable. However, once you convert it from BTC to ZAR and withdraw from an exhange e.g. Luno. THAT will trigger a taxable event. Now my current understanding (which is a bit of an assumption) is that if you bought BTC as an investment when it was low, then waited sometime say months/years, then sold it for ZAR. That would be a capital gains tax on the profit you made. E.g. You invest R100 five years ago in BTC. You now cash out say R5000. There's a capital gain of R4900. That will be taxed at 12.5% under Capital Gains Tax provisions.

Wrong?

 

[CarlaJones]

If you buy BTC on a foreign exchange with funds wired from a ZA bank account under Single Discretionary Allowance, and you sell those BTC locally in ZA for profit that is deposited again in your ZA bank account, and you rinse&repeat in trading fashion, would SARS/SARB see that as an act of importing and tax one accordingly?

Or, would such trading involving foreign-bought BTC sold locally only be seen as something like stock trading involving income-related taxation?

If SARS turns around later on and slaps you with import taxes in a 30-50% bracket that'd be quite nasty.

 

[Jehosefat]

If you buy BTC on a foreign exchange with funds wired from a ZA bank account under Single Discretionary Allowance, and you sell those BTC locally in ZA for profit that is deposited again in your ZA bank account, and you rinse&repeat in trading fashion, would SARS/SARB see that as an act of importing and tax one accordingly?

Or, would such trading involving foreign-bought BTC sold locally only be seen as something like stock trading involving income-related taxation?

If SARS turns around later on and slaps you with import taxes in a 30-50% bracket that'd be quite nasty.

What exactly are you importing?

Sounds very much like a Foreign Exchange transaction to me which means it would either fall under income tax or capital gains tax.

 

[User4456]

What exactly are you importing?

Sounds very much like a Foreign Exchange transaction to me which means it would either fall under income tax or capital gains tax.

Well I wish we could get a clear answer on which it is. If SARS obtusely default to income tax you will get hit for as much as 40% as you quickly blow through the tax brackets. Otherwise its just 12.5% CGT no?

Anyone know a Bitcoin tax consultant in SA? It would be nice to start clearing this up once and for all. People need to know whether to invest in SA or take their money elsewhere. Otherwise when it comes to big numbers most investors are likely to just cash out in a jurisdiction with crystal clear rules/much lower taxes.

 

[Archer]

Bitcoin is not taxable in South Africa.

In what world?
Is there value attributed to BTC? If yes, and if you sell it, then guess what, you're gonna pay tax on those proceeds. The same as if you sold rocks or chickens or balance bracelets. The fact that they do not recognise it as currency actually provides strength to this argument, that most likely they will see it as a commodity being traded.

I would suggest keeping good records of everything being done, so that you can prove things to SARS, otherwise they'll just have some fun and charge you the world.

 

[Jehosefat]

Well I wish we could get a clear answer on which it is. If SARS obtusely default to income tax you will get hit for as much as 40% as you quickly blow through the tax brackets. Otherwise its just 12.5% CGT no?

Anyone know a Bitcoin tax consultant in SA? It would be nice to start clearing this up once and for all. People need to know whether to invest in SA or take their money elsewhere. Otherwise when it comes to big numbers most investors are likely to just cash out in a jurisdiction with crystal clear rules/much lower taxes.

Uh, why would bitcoin trading/investing be any different to normal stock trading/investing? They should (and I would be surprised if they don't) apply the same rules to determine whether the gains were capital in nature (long term investing) versus income in nature (short term trading).

 

[Quarkiee]

Anyone talking to a tax consultant about this?

 

[Willie Trombone]

In what world?
Is there value attributed to BTC? If yes, and if you sell it, then guess what, you're gonna pay tax on those proceeds. The same as if you sold rocks or chickens or balance bracelets. The fact that they do not recognise it as currency actually provides strength to this argument, that most likely they will see it as a commodity being traded.

I would suggest keeping good records of everything being done, so that you can prove things to SARS, otherwise they'll just have some fun and charge you the world.

Looks like you agree with what Thor has been saying all along.

 

[Willie Trombone]

Uh, why would bitcoin trading/investing be any different to normal stock trading/investing? They should (and I would be surprised if they don't) apply the same rules to determine whether the gains were capital in nature (long term investing) versus income in nature (short term trading).

With Forex, if your funds remain in your forex account with the broker, at what point do you pay tax on gains / losses?
What about funds in a foreign account - if you earn interest (in forex) on funds sitting in a foreign account - what are the rules there?