Where to declare your cryptocurrency holdings on your tax return

Jan

Who's the Boss?
Staff member
Joined
May 24, 2010
Messages
6,315
How to declare your Bitcoin to SARS

South Africans who trade in or own cryptocurrencies like bitcoin, ether, and dogecoin must declare this to SARS or face severe financial penalties.

While most governmental financial institutions in South Africa don’t regard cryptocurrencies as having any value, SARS considers cryptocurrencies as intangible assets, which means any income received or accrued from cryptocurrencies is taxable.
 

Praemon

Expert Member
Joined
Jan 11, 2007
Messages
1,493
Does anyone know if crypto kept on a local exchange or on a Wallet on a local device should be declared as local or foreign assets in the Statement of Assets and Liabilities’ section? If foreign, then presumably it's at the exchange rate of that crypto at the end of the financial year? Hopefully it just stays as local so it's straight ZAR cost.

Can't seem to find any real conclusive information on this anywhere.
 

garp

Executive Member
Joined
Aug 2, 2004
Messages
9,078
It seems like they are on a schedule of one scary SARS crypto story per week.

Riddle me this. How do you treat a perfectly fungible good as a capital asset? When I sell/trade some portion of my hypothetical Bitcoin holding collected over years, how does SARS identify which portion it was? Was it the Bitcoin from 2013, 2016, 2018, 2019 or 2021? With an actual physical asset it is obvious which land, which piece of art, which antique you are selling and when you bought it. This is not the case with fungible currency which is partly why fungible currency is not normally treated as a capital asset.
 

Gaz{M}

Executive Member
Joined
Feb 9, 2005
Messages
6,945
So do you have to declare if you held any crypto at any point during the year? Or only if you still hold crypto at tax return time?

Because what is the point of saying you had, say R50 000 of bitcoin last year when you sold it a while back. Also, what is the value of the crypto that you put on your return? Is it the value 1 second before you click submit on your tax return? What about exchange rates?

It is all pointless and clear as mud.
 

Speedster

Honorary Master
Joined
May 2, 2006
Messages
15,781
It seems like they are on a schedule of one scary SARS crypto story per week.

Riddle me this. How do you treat a perfectly fungible good as a capital asset? When I sell/trade some portion of my hypothetical Bitcoin holding collected over years, how does SARS identify which portion it was? Was it the Bitcoin from 2013, 2016, 2018, 2019 or 2021? With an actual physical asset it is obvious which land, which piece of art, which antique you are selling and when you bought it. This is not the case with fungible currency which is partly why fungible currency is not normally treated as a capital asset.
The same way as your equity, mutual fund or ETF investment
 

deweyzeph

Executive Member
Joined
Apr 17, 2009
Messages
9,117
It seems like they are on a schedule of one scary SARS crypto story per week.

Riddle me this. How do you treat a perfectly fungible good as a capital asset? When I sell/trade some portion of my hypothetical Bitcoin holding collected over years, how does SARS identify which portion it was? Was it the Bitcoin from 2013, 2016, 2018, 2019 or 2021? With an actual physical asset it is obvious which land, which piece of art, which antique you are selling and when you bought it. This is not the case with fungible currency which is partly why fungible currency is not normally treated as a capital asset.

Weighted average cost. Exactly the same as when you sell shares or unit trusts.
 

JohnMao

Executive Member
Joined
May 21, 2018
Messages
8,759
I only make a loss at the moment. Do I get money back? Not sure they're interested in my piddly R2500.
 

Wary GOM

Expert Member
Joined
Aug 23, 2019
Messages
1,632
SARS
The same way as your equity, mutual fund or ETF investment
Yup. So cost is at time of purchase and price is at time of sale. Numerous purchases and sales treated like equities/ETFs, but these are generally not the same asset that is bought and sold often in a year. I am still confused about what to do with multiple day trades in reporting, though. I will probably just bundle all purchases and all sales as totals per tax year.
 

deweyzeph

Executive Member
Joined
Apr 17, 2009
Messages
9,117
So do you have to declare if you held any crypto at any point during the year? Or only if you still hold crypto at tax return time?

Because what is the point of saying you had, say R50 000 of bitcoin last year when you sold it a while back. Also, what is the value of the crypto that you put on your return? Is it the value 1 second before you click submit on your tax return? What about exchange rates?

It is all pointless and clear as mud.

The statement of assets and liabilities is essentially your personal balance sheet as at 28 February (the last day of the tax year). If you sold an asset on 27 Feb then you cannot show it on your balance sheet on 28 Feb because that would not be a true reflection of the assets you own as at 28 Feb.
 

Speedster

Honorary Master
Joined
May 2, 2006
Messages
15,781
SARS

Yup. So cost is at time of purchase and price is at time of sale. Numerous purchases and sales treated like equities/ETFs, but these are generally not the same asset that is bought and sold often in a year. I am still confused about what to do with multiple day trades in reporting, though. I will probably just bundle all purchases and all sales as totals per tax year.
That's what I've done. If they ask how I got to that number I'll send them an excel sheet with the breakdown. They haven't asked as yet though
 

Wary GOM

Expert Member
Joined
Aug 23, 2019
Messages
1,632
I only make a loss at the moment. Do I get money back? Not sure they're interested in my piddly R2500.
Do you still hold that loss-making crypto? If so it isn’t yet a realized loss. Surely this isn’t reportable yet?

Anyway, SARS doesn’t pay us anything if they possibly can avoid it.
 

JohnMao

Executive Member
Joined
May 21, 2018
Messages
8,759
Do you still hold that loss-making crypto? If so it isn’t yet a realized loss. Surely this isn’t reportable yet?

Anyway, SARS doesn’t pay us anything if they possibly can avoid it.
Yeah, put in a bit every month.
 

Gaz{M}

Executive Member
Joined
Feb 9, 2005
Messages
6,945
So sell all your crypto on 27 feb each year and rebuy 29th/1 March.
 

hyperian

Expert Member
Joined
Apr 17, 2008
Messages
1,919
So if I've already submitted my tax return and only realised now that I need to declare the BTC I'm holding, how do I go about fixing that?
 

deweyzeph

Executive Member
Joined
Apr 17, 2009
Messages
9,117
So if I've already submitted my tax return and only realised now that I need to declare the BTC I'm holding, how do I go about fixing that?

Go to your 2021 Income Tax working page in Efiling, and then click the "Correction" button.
 

Scorpion101

Well-Known Member
Joined
Dec 8, 2013
Messages
202
I dont understand why i should pay tax on crypto to SARS when my salary is taxed and when i purchase the crypto i hold it long term. I am the one taking the risk and should the crypto be worth nothing in 5 years will SARS compensate me for my loss. My point being i take the risk on my own if they want a stake in my revenue generated then they should also be liable when their is lose.
 
Top