Testing Takealot vouchers bought with mined Litecoin

[Snyper564]

This is 100% taxable event




Lets say you bought that LTC for R10 last year and use it now for a R250 takealot voucher.

R240 is treated as a taxable gain. it does not matter that it is overseas that has 0 bearing on anything.

I see the test was R500 takealot voucher so the example can be as follows:

Bought LTC for R10 last year, buy takealot voucher via bitrefil for R500. You pay tax on the gain of R490

 

[Gaz{M}]

This is 100% taxable event


View attachment 1307970

Lets say you bought that LTC for R10 last year and use it now for a R250 takealot voucher.

R240 is treated as a taxable gain. it does not matter that it is overseas that has 0 bearing on anything.

I see the test was R500 takealot voucher so the example can be as follows:

Bought LTC for R10 last year, buy takealot voucher via bitrefil for R500. You pay tax on the gain of R490

Do you work for SARS or something? Or the ANC?

 

[Snyper564]

Do you work for SARS or something? Or the ANC?

Been in crypto for years, I dont mess with SARS.

The amounts I work with are significant so my crypto affairs need to be in order ALL the time.

 

[Gaz{M}]

Been in crypto for years, I dont mess with SARS.

The amounts I work with are significant so my crypto affairs need to be in order ALL the time.

SARS Crypto Investigation Unit:

 

[Snyper564]

SARS Crypto Investigation Unit:

View attachment 1307990

You joke, I have had an annual assessment/audit for the last 4 years. So rather safe than sorry

 

[Praemon]

This is 100% taxable event


View attachment 1307970

Lets say you bought that LTC for R10 last year and use it now for a R250 takealot voucher.

R240 is treated as a taxable gain. it does not matter that it is overseas that has 0 bearing on anything.

I see the test was R500 takealot voucher so the example can be as follows:

Bought LTC for R10 last year, buy takealot voucher via bitrefil for R500. You pay tax on the gain of R490

This is correct. Worth also mentioning it would likely be taxed under normal income unless you can prove it was an investment for capital gains that you decided to cash out (which is more difficult without timing rules like for shares).

The other side is that if you make a loss on the crypto, you can set it off against other crypto gains (just remember it's ring fenced).

 

[Praemon]

Did you pay vat?

Monetary vouchers do not attract VAT on sale, but on redemption (ie. when using it on Takealot that VAT is applied on the goods sold). However, Bitrefil are selling the voucher above face value and therefore VAT applies to the amount over face value. So if a R500 voucher was sold for R527.83, then VAT would be R4.17 (15% on R27.83). If Bitrefil is not declaring the VAT, then it's an imported service and you'd have to declare it to SARS directly yourself. If Bitrefil are selling enough vouchers into South Africa they will likely hit the minimum requirement to register as a VAT vendor and are required to pay it over to SARS directly.

Of course, the chances of anyone actually doing the above is small (which is why SARS changed tact to target vendors rather than end-users), but the above is how it's meant to be applied to be completely legal.

 

[ADrunkTeddyBear]

This is 100% taxable event


View attachment 1307970

Lets say you bought that LTC for R10 last year and use it now for a R250 takealot voucher.

R240 is treated as a taxable gain. it does not matter that it is overseas that has 0 bearing on anything.

I see the test was R500 takealot voucher so the example can be as follows:

Bought LTC for R10 last year, buy takealot voucher via bitrefil for R500. You pay tax on the gain of R490

I feel like this just a headache for me to keep track off.

I have old crypto. Like from my high school days.

Some of those exchanges have closed down now and are long forgotten to the history books.

I also mined BTC back when you could mine if off a PC.

All of that is now on hardware wallet. I dont know anymore what amount was bought and what amount was mined lol

 

[airborne]

I feel like this just a headache for me to keep track off.

I have old crypto. Like from my high school days.

Some of those exchanges have closed down now and are long forgotten to the history books.

I also mined BTC back when you could mine if off a PC.

All of that is now on hardware wallet. I dont know anymore what amount was bought and what amount was mined lol

How does that saying go.. if a tree falls in the forest and no one saw it fall, did it really fall?

 

[die_koos]

Can someone please educate me on something, I just can't figure out the logic myself. Transactions like these make no financial sense to me unless all parties involved only deal in crypto and never use fiat.

From the article: "At the time of purchase, the exchange rate was R1623.20 per LTC. Therefore, we spent Litecoin worth R527.83 for Takealot vouchers worth R500."

Cool if you are trying to write an article, not cool if you need to spend 5% more on everything just because you want to use crypto.

But what happens if the inverse happens - at the time of the transaction or just before it the price of Litecoin dropped and you end up spending R 475 worth of Litecoin for a R 500 Takealot voucher. Score for you, but any business that this happens to repeatedly will soon run out of money.... this can likely be avoided for buying vouchers etc. because you could block the sale if the value drops automatically ... but what about physical goods.

I buy a car from a dealer today using 1 btc, which is valued at about R 500k at the moment.

At the end of the month he now needs to pay salaries, rent, utilities etc but now the price has dropped to R450k per btc. so, he effectively lost 10%. and since he is not a btc mogul he can't just hold on to it until the price goes back up without "financing" it using fiat, which negates the whole purpose of using crypto?

I understand that the price fluctuates, and it could be a question of it averaging out over time but if you have a hard deadline to pay for something and you can't use crypto to pay you could end up losing a lot of money.

 

[airborne]

Can someone please educate me on something, I just can't figure out the logic myself. Transactions like these make no financial sense to me unless all parties involved only deal in crypto and never use fiat.

From the article: "At the time of purchase, the exchange rate was R1623.20 per LTC. Therefore, we spent Litecoin worth R527.83 for Takealot vouchers worth R500."

Cool if you are trying to write an article, not cool if you need to spend 5% more on everything just because you want to use crypto.

But what happens if the inverse happens - at the time of the transaction or just before it the price of Litecoin dropped and you end up spending R 475 worth of Litecoin for a R 500 Takealot voucher. Score for you, but any business that this happens to repeatedly will soon run out of money.... this can likely be avoided for buying vouchers etc. because you could block the sale if the value drops automatically ... but what about physical goods.

I buy a car from a dealer today using 1 btc, which is valued at about R 500k at the moment.

At the end of the month he now needs to pay salaries, rent, utilities etc but now the price has dropped to R450k per btc. so, he effectively lost 10%. and since he is not a btc mogul he can't just hold on to it until the price goes back up without "financing" it using fiat, which negates the whole purpose of using crypto?

I understand that the price fluctuates, and it could be a question of it averaging out over time but if you have a hard deadline to pay for something and you can't use crypto to pay you could end up losing a lot of money.

It’s essentially just a currency conversion same as if they were accepting dollars to buy takealot vouchers, so they will charge a conversion fee at purchase and then probably immediately convert the BT to whatever currency they natively operate in.