Crypto earnings & Capital Gains Tax

SaiyanZ

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I can claim for losses from SARS right?
I think if you have made profits on other investments like shares then you should be able to offset those profits with the crypto losses before calculating tax.
 

Sly21C

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Americans have to also pay tax on crypto to crypto trades on international exchanges. That is just pure theft. Tax should only be on crypto to fiat, not crypto to crypto.
 

balrog

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So it seems the safest way is to pay your income tax rate on all Crypto to fiat payouts from Luno. Ugh - that's gonna sting. *SIGH*

SO for every Rand I pay out, I will put one in my home loan. Keep it in my bond for as long as possible to save on interest, then pay over the required amount (according to my income tax rate) to SARS. Can at least get something for my tax money then by saving on bond interest *CRY*
 
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*SynergyX*

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as far as im concerned -- i bought bitcoin and then it got stolen in some hack...

never going to see my bank account again --- tax man can suck it.
 

SaiyanZ

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So it seems the safest way is to pay your income tax rate on all Crypto to fiat payouts from Luno. Ugh - that's gonna sting. *SIGH*

SO for every Rand I pay out, I will put one in my home loan. Keep it in my bond for as long as possible to save on interest, then pay over the required amount (according to my income tax rate) to SARS. Can at least get something for my tax money then by saving on bond interest *CRY*
You only have to pay tax on profits. Not all withdrawals. If you take out less than you put in then you don't have to pay any tax but probably still need to declare it. Just keep proof of the money sent to the exchange so that you can show SARS if they dig.
 

balrog

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You only have to pay tax on profits. Not all withdrawals. If you take out less than you put in then you don't have to pay any tax but probably still need to declare it. Just keep proof of the money sent to the exchange so that you can show SARS if they dig.
Thanks, I will use that for the 2017/18 tax return. But currently I only have about R10k more to go, then all the fiat I have ever put in equals my withdrawals :( And there is still a bundle I hold in crypto, and its still growing nicely...

The plan this year, is to pay off some stuff from my crypto gains, so the taxman will unfortunately want to claim his pound of flesh....
 
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SaiyanZ

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Thanks, I will use that for the 2017/18 tax return. But currently I only have about R10k more to go, then all the fiat I have ever put in equals my withdrawals :( And there is still a bundle I hold in crypto, and its still growing nicely...

The plan this year, is to pay off some stuff from my crypto gains, so the taxman will unfortunately want to claim his pound of flesh....
I will only withdraw in cash when I need it or for that Lambo. So for the next year or so I will just keep trading and growing my portfolio without having to worry about tax issues.

I would suggest this to everyone. Only withdraw in cash if you actually need the money for something or if you want to exit the crypto market for a while.
 

SaiyanZ

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Seems like the treasury wants to put annoying rules in place:

“Treasury has proposed to include the acquisition or disposal of any cryptocurrency under the ring-fencing of assessed loss provisions (colloquially referred to as suspect trades).”

“This will result in cryptocurrency dealers not being able to offset the losses incurred from the dealing in cryptocurrencies from any other trade.”

“In other words, these losses are ring-fenced to be used only against future profits earned from cryptocurrencies.”
https://mybroadband.co.za/news/cryptocurrency/268771-bitcoin-trading-could-be-exempt-from-vat-in-south-africa.html
 

Method

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So any gains in crypto is seen as Capital gains, that is 100% the case?

I would hate to pay income tax on it >.<
 

Swa

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Easter Bunny

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i love how mybb has so many articles about how to calculate your crypto tax and how to see what tax you need to pay and how luno is helping... and then it's just words saying nothing.

as i understand it, if i have put R2500 into luno and altcoinexchange (in total), and have only bought and sold coins in a failed attempt at winning, but haven't cashed out anything, i don't need to declare anything, because none of that money has made it back to my bank account? i'm never planning on putting in more and have decided to see if i can one day make back what i lost. at the moment i'm calling it school fees. :)
 

seted

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i love how mybb has so many articles about how to calculate your crypto tax and how to see what tax you need to pay and how luno is helping... and then it's just words saying nothing.

as i understand it, if i have put R2500 into luno and altcoinexchange (in total), and have only bought and sold coins in a failed attempt at winning, but haven't cashed out anything, i don't need to declare anything, because none of that money has made it back to my bank account? i'm never planning on putting in more and have decided to see if i can one day make back what i lost. at the moment i'm calling it school fees. :)
South Africa's income tax system is based on accrual. The question is, when did the income accrue to you? It doesn't matter if the money is in your bank account or with an exchange. The moment you become unconditionally entitled to that money, SARS must be given its cut.
 

Easter Bunny

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South Africa's income tax system is based on accrual. The question is, when did the income accrue to you? It doesn't matter if the money is in your bank account or with an exchange. The moment you become unconditionally entitled to that money, SARS must be given its cut.
well fudge. this makes it difficult again. was hoping i'd only have to figure it out when i withdraw.

i followed this:


(from here https://thebeancounter.co.za/why-you-want-to-declare-your-cryptocurrency-to-sars)

and got this:
1540188707795.png

this would be the part i fill out then?
 

Swa

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i love how mybb has so many articles about how to calculate your crypto tax and how to see what tax you need to pay and how luno is helping... and then it's just words saying nothing.

as i understand it, if i have put R2500 into luno and altcoinexchange (in total), and have only bought and sold coins in a failed attempt at winning, but haven't cashed out anything, i don't need to declare anything, because none of that money has made it back to my bank account? i'm never planning on putting in more and have decided to see if i can one day make back what i lost. at the moment i'm calling it school fees. :)
South Africa's income tax system is based on accrual. The question is, when did the income accrue to you? It doesn't matter if the money is in your bank account or with an exchange. The moment you become unconditionally entitled to that money, SARS must be given its cut.
This. Whether money is in your bank account or not is irrelevant. If you bought and sold at a profit then technically you have to pay tax on that. But if you're going to declare profit you'd better declare losses as well. A simple way to do it for multiple trades throughout the day is to take last selling balance in in the year minus starting balance.
 

Dark Agent

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I already read this:
https://mybroadband.co.za/news/cryptocurrency/257049-calculating-how-much-bitcoin-tax-you-must-pay-sars.html

Me and a couple of friends were mining high stakes(solo mining) and made a couple of blocks(ZCash and Horizon) which we converted to bitcoin.

We sold most in October(Converted to Tether $6200) and repurchased bitcoin in January($3500). I have a total of 7 bitcoins that I converted into Rands this week(after the 28 February, moved on 8 March to the local exchange, converted this weekend to Rands).

January this year I already have withdrawn my original capital + R38000 extra since people told me I am allowed R40000.

Now I want to withdraw the money to pay off my house bond but I also don't want to get in the wrong side with SARS.
If I withdraw R420k, When do I have to pay tax and when should I declare it? My understanding is Next year July when I do my personal income tax.
What type of tax should I have to pay?
What is the estimated taxes?
 

Method

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I already read this:
https://mybroadband.co.za/news/cryptocurrency/257049-calculating-how-much-bitcoin-tax-you-must-pay-sars.html

Me and a couple of friends were mining high stakes(solo mining) and made a couple of blocks(ZCash and Horizon) which we converted to bitcoin.

We sold most in October(Converted to Tether $6200) and repurchased bitcoin in January($3500). I have a total of 7 bitcoins that I converted into Rands this week(after the 28 February, moved on 8 March to the local exchange, converted this weekend to Rands).

January this year I already have withdrawn my original capital + R38000 extra since people told me I am allowed R40000.

Now I want to withdraw the money to pay off my house bond but I also don't want to get in the wrong side with SARS.
If I withdraw R420k, When do I have to pay tax and when should I declare it? My understanding is Next year July when I do my personal income tax.
What type of tax should I have to pay?
What is the estimated taxes?
As I understand it will be capital gains tax, which is 18% of the amount you withdraw-your capital (which you already withdrew so just 18% of R420k.

On that, I would suggest holding on the your BTC just a little bit longer. Now is not a good time to sell.
 

Swa

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It's not so simple. It's 18% of the amount that's added to your income after the allowed deduction and taxed according to your tax bracket. However what you made isn't a capital gain. If your capital you're referring to is what you paid for the machine then the value of the resulting Bitcoin can be seen as a product you produce with it. Thus only when selling the equipment will a capital gain or loss be incurred.

Actually the correct way is to offset the depreciation on the equipment against what you made. You'll then have had to pay tax on the resultant difference according to the value at the time. The only capital gain is then the difference in value between now and then. However since it hasn't been 3 years and you've converted multiple times and sold and rebought during that time it will be hard to claim it as capital gains.
 
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