Crypto earnings & Capital Gains Tax

Dark Agent

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Also if I converted from zcash to bitcoin to tether?
Since I just transferring tether to bitcoin to Rand.

Lastly when do I need to declare it?
 

Dark Agent

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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.
Thanks,
I only use bitcoin as a transfer mechanism and not an investment. I saw opportunity to make money on mining via fpga and did it. I converted immediately to bitcoin and then to tether. So the value remained the same. $100 October is $100 in March(maybe $110 due to increase in value but that's just $10). Bitcoin was just a transfer mechanism.
 

Swa

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Also if I converted from zcash to bitcoin to tether?
Since I just transferring tether to bitcoin to Rand.

Lastly when do I need to declare it?
It's all confusing on SARS' part as there's no clear regulations. Converting can be seen as a tax event as you are making an exchange of goods based on current value. One thing we do know is that mining isn't a capital gain as it's a commercial enterprise. You'll be ordinarily taxed in the year it was mined based on the spot value at the time. The only capital gain is the difference in current value vs mined value if you can show it to be a capital holding.

My unofficial stance on this though is screw SARS as it's just too complicated with no realistic way to comply.
 

Snyper564

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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.

I agree with this you didn't hold those coins but traded for others this is simply income tax.

I bought XRP in Dec two years ago made my 30k profit in 2 weeks cashed out and paid income tax at year end. This isn't CGT but income tax. Trading forex would have been similar to this.
 

Dark Agent

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I agree with this you didn't hold those coins but traded for others this is simply income tax.

I bought XRP in Dec two years ago made my 30k profit in 2 weeks cashed out and paid income tax at year end. This isn't CGT but income tax. Trading forex would have been similar to this.
My case it be personal income tax since not a business.

If I did it after Financial Year Feb 2019, I only need to declare it in perioid of March 2019- Feb 2020( which I need to file only in July 2020)?
My plan is to pay off the loan and the same installment use to save up for tax next year.
 

Snyper564

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My case it be personal income tax since not a business.

If I did it after Financial Year Feb 2019, I only need to declare it in perioid of March 2019- Feb 2020( which I need to file only in July 2020)?
My plan is to pay off the loan and the same installment use to save up for tax next year.
you can actually probably push that payment all the way till filing season closes in Nov next year. That's what I did left it till the last filing week as I needed to pay in .
 

vipermagi

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Wow not even one reply this year lol...

Do u need to submit trade history when cashing out from BTC or USDT to ZAR?
 

balrog

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Wow not even one reply this year lol...

Do u need to submit trade history when cashing out from BTC or USDT to ZAR?

I am NOT an expert, but from what I have read, it seems like:

1. If you want to claim to only pay CGT, you must have had the (say) BTC for more than 3 years and I guess you would need to give some proof of the amount you bought (as well as date and value at that time), and then the amount and value when you sold. Then use the Base cost and Capital Gain, to calculate the tax you owe.

2. If you were just trading short term, the amount of profit you made, will be taxable at your relevant tax bracket and you will have to pay tax on the profit. But only if you convert to Fiat(ZAR). I think you will just have to calculate your amount of profit converted to Fiat, and not necessarily have to show any trading history.
 
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balrog

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Much has been said of the taxable event being when you sell your BTC for Fiat.

But what happens in the case where you never convert to Fiat, but buy a product or service with your BTC profits?

Does the Fiat value of the product or service determine the tax to be payable?

Example:
So say you buy 1 x thingamabob from an online store A. You pay the store 0.01 BTC for said thingamabob. Should you convert the BTC price to ZAR and pay tax on calculated value of the thingamabob?

Is tax even relevant? (Well I guess tax is ALWAYS relevant - LOL!)
 

garp

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Much has been said of the taxable event being when you sell your BTC for Fiat.

But what happens in the case where you never convert to Fiat, but buy a product or service with your BTC profits?

Does the Fiat value of the product or service determine the tax to be payable?

Example:
So say you buy 1 x thingamabob from an online store A. You pay the store 0.01 BTC for said thingamabob. Should you convert the BTC price to ZAR and pay tax on calculated value of the thingamabob?

Is tax even relevant? (Well I guess tax is ALWAYS relevant - LOL!)
This would be considered as equivalent to a conversion to FIAT and therefore a taxable event according to which the same rules would apply as if you had merely sold the BTC for FIAT.
 

balrog

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This would be considered as equivalent to a conversion to FIAT and therefore a taxable event according to which the same rules would apply as if you had merely sold the BTC for FIAT.

Thanks garp! OK, so that is actually pretty clear then.
 

saor

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Where are we at with this in 2021?

If someone is trading crypto on international exchanges and on a monthly basis cashing out to ZAR via local exchanges, is that a straightforward income tax payment or does the due tax still depend on when their trading account was initially funded? Is tax due on any amount ie. cashing out R500 and R5000 both require tax or is there a threshold?

Haven't seen any recent (clear) guidelines on the situation.
 

Speedster

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Where are we at with this in 2021?

If someone is trading crypto on international exchanges and on a monthly basis cashing out to ZAR via local exchanges, is that a straightforward income tax payment or does the due tax still depend on when their trading account was initially funded? Is tax due on any amount ie. cashing out R500 and R5000 both require tax or is there a threshold?

Haven't seen any recent (clear) guidelines on the situation.
If it is from trading then it'll be income tax. Only if there is a genuine intention to keep the crypto for an extended period can a case be made for capital gain.
 

Swa

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Where are we at with this in 2021?

If someone is trading crypto on international exchanges and on a monthly basis cashing out to ZAR via local exchanges, is that a straightforward income tax payment or does the due tax still depend on when their trading account was initially funded? Is tax due on any amount ie. cashing out R500 and R5000 both require tax or is there a threshold?

Haven't seen any recent (clear) guidelines on the situation.
Any conversion is a tax event same as stock trading. Whether you cash out or convert to Rand is irrelevant.
 

saor

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If it is from trading then it'll be income tax. Only if there is a genuine intention to keep the crypto for an extended period can a case be made for capital gain.
Let's say I initially bought bitcoin 4 years ago and it's been traded and moved around the world etc. and eventually ended up in a wallet somewhere. 4 years later I'm trading again and cashing out some profits each month. Can that just be treated as income tax?
 

saor

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Any conversion is a tax event same as stock trading. Whether you cash out or convert to Rand is irrelevant.
Yup. Just wondering what the simplest way is to do the right thing to avoid SARS in the future. Presumably withdrawals from crypto exchanges reflect in a way that SARS can monitor?
 

Swa

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Yup. Just wondering what the simplest way is to do the right thing to avoid SARS in the future. Presumably withdrawals from crypto exchanges reflect in a way that SARS can monitor?
Currently not, but the info can be requested.
 

saor

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Currently not, but the info can be requested.
Yup. Take your chances now with tax-free cashouts and then SARS decides next year to trawl through everything and start taxing. Because presumably they can tax you now for profits you made last year or whatever.
 
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