SARS wants to track and tax Bitcoin trades

[MrGray]

What is defined as making money on Bitcoins for to be taxed-?

Example:I invest in bitcoin, the promise of money to me go up & up, so the promised value went up, however I would not know for certain how much I earned until I revert it to cash in my bank account, then they/me could see my profit earned. Now this could be after 10 years of investment-?.

Example:I invest over years in bitcoin, but never cash out the investment to my bank account. Now if they tax me yearly on the promised earnings, but not cashed out, and now 10 years later the market fall flat I loose everything, cash out zero....How is this going to play out-? In this case I paid a load of tax, but in reality did not earn a cent-?

How, when/period are they going to tax-?

The general principle is that tax is only incurred at a taxable event caused by a transaction. As far as I know, there is no tax implication if you just hold and never convert to currency, no matter how long you do that for.

 

[CT_Biker]

So they're concerned that people will start paying each other for goods and services in BTC to avoid tax? This might be a valid concern, and they would be able to track this easily if people just stayed in BTC and used the same addresses, but in practice it will not be that easy to track anyone with a modicum of sophistication. I'm not endorsing tax evasion at all, nor trying to give advice, just saying that it will not necessarily be as easy as they seem to assume. You can create new addresses on the fly, change into other cryptos, convert on far flung exchanges, use blenders, etc etc.

And what happens if a user gets hacked or loses their wallet? How do you even begin to prove this?

Responding to what I highlighted in bold: That nullifies VAT which causes profit loss for the Government.

 

[CT_Biker]

The general principle is that tax is only incurred at a taxable event caused by a transaction. As far as I know, there is no tax implication if you just hold and never convert to currency, no matter how long you do that for.

Technically, Bitcoin is stateless/decentralized thus you cannot tax it, as it does not formally exist.

 

[Arthur]

Technically, Bitcoin is stateless/decentralized thus you cannot tax it, as it does not formally exist.

That hasn't been a requirement for recognising the existence of anything since King Mursili I ascended the Hittite throne in 1556 BC. Besides, gov taxes you on earnings from anything and everything. All it has to say is "Bitcoin gains are taxable" and, voila!, it's taxable.