crypto "bank" cards?

[Sensorei]

I see so many people getting themselves into a tax nightmare over crypto. Even worse, they don't even realise it yet. When you ask them if they've considered the tax consequences of what they're doing they just look blankly at you and ask what do you mean.

Examples? I understand the technicalities, but I want to see one real case of SARS going after people for small crypto transactions. It's just as much of a nightmare for SARS.

I know many people locally who have been in crypto for at least a few years now, with 5 or 6 of them being very careless about crypto profits and tax. One guy literally lives purely off trading profits and doesn't file a tax return. I warn him all the time and he's probably going to be nailed, but I haven't seen anything go down yet anywhere.

 

[deweyzeph]

If you really want to protect yourself against the depreciation of the rand in a tax-efficient manner then you would be far better off opening a GBP or USD offshore bank account with a debit card and then use that card to buy stuff in South Africa. Individuals who are not currency traders do not pay any tax on realised or unrealised forex gains (see section 24l of the Income Tax Act). However because crypto is not recognised as a proper currency by SARS, none of the provisions of section 24l apply to it.

 

[deweyzeph]

Examples? I understand the technicalities, but I want to see one real case of SARS going after people for small crypto transactions. It's just as much of a nightmare for SARS.

I know many people locally who have been in crypto for at least a few years now, with 5 or 6 of them being very careless about crypto profits and tax. One guy literally lives purely off trading profits and doesn't file a tax return. I warn him all the time and he's probably going to be nailed, but I haven't seen anything go down yet anywhere.

There's no current examples that I know of at the moment, but the party is bound to come to an end pretty soon. These things have a way of catching up to you in the future when you least expect it. The core of the problem is that people naively think that crypto is a real currency and treat it as such for tax purposes, when SARS has made it very clear that it does not consider crypto to be a currency at all and is therefore subject to all the usual income tax and capital gains tax rules on the buying and selling of assets.

 

[gvanto]

If you really want to protect yourself against the depreciation of the rand in a tax-efficient manner then you would be far better off opening a GBP or USD offshore bank account with a debit card and then use that card to buy stuff in South Africa. Individuals who are not currency traders do not pay any tax on realised or unrealised forex gains (see section 24l of the Income Tax Act). However because crypto is not recognised as a proper currency by SARS, none of the provisions of section 24l apply to it.

Thanks deweyzeph,
What classes someone as a currency trader/not? If my dayjob is a web developer but I trade some forex on the side (but withdraw profits using crypto), would this qualify do you reckon?

 

[deweyzeph]

Thanks deweyzeph,
What classes someone as a currency trader/not? If my dayjob is a web developer but I trade some forex on the side (but withdraw profits using crypto), would this qualify do you reckon?

I'm not a tax professional, but I would imagine that if you are buying and selling forex for the express purpose of generating a profit then you are a currency trader.

 

[Snyper564]

I'm not a tax professional, but I would imagine that if you are buying and selling forex for the express purpose of generating a profit then you are a currency trader.

yup even performing one trade a month could trigger this.

Its not a bad thing at all though as all expenses linked to said trade can be deducted for tax purposes too.