By Siwele Aldrin Tinyiko
SOUTH AFRICAN REVENUE SERVICE TAX IMPLICATIONS TO CRYPTO CURRENCIES
Many market participants, Investors, Businesses, Traders and Buyers are still uncertain about the tax implications concerning crypto currencies in South Africa; however it seems as this matter is ironed now. Crypto currencies are an internet digital currency that serves as a medium of payment. To clear the thoughts; there are a lot of Crypto currencies like, Bitcoin , Litecoin , Dogecoin, Peer Coin, Pot Coin and others, well! Others are still coming since the world seems to be moving up on an online interlude. Since 2010 we have seen most of crypto currencies taking their positions in the market and the majority of these market participants are daily adopting them as their online medium of exchange.
Do you have to pay Tax as a Crypto currency user?
“Every Business, Individual, Buyer, Seller, Trader, Investor or any natural person who mines or receives payments in the form of crypto currencies is subjected by law to normal tax implications and all these parties involved are obliged by law to register to pay tax and any party who fails to do so may face legal consequences, penalties, interest and other judgement that may be implied by law.”
For the past years SARS (South African Revenue Service) in partnership with the (SARB) South African Reserve Bank has been doing research about big companies that are in crypto currencies to understand how they operate and their monitoring procedure concerning these currencies.
South African Crypto Currency Laws
Dodging the law by not complying with your crypto currencies gains and or losses is a very bad idea. If you are one of those tax resisters or tax protesters you should make sure that you do not find yourselves in the bad hands of the law since tax evasion is classified as a crime and it is much advisable to start fixing your papers as urgent as possible. All parties need to pay the tax if their total taxable income received in crypto currencies exceeds the tax threshold for a particular financial year.
According to SARS crypto currencies are not regarded as currencies however they are to be regarded as a non-tangible assets or intangible assets and are not recognized as currencies or any form of payments. Based on the media briefing of April 2018 SARS will still proceed with applying normal income tax rules to crypto currencies and all market participants has to indicate in their annual tax return their capital gains or losses. The annual exclusion to pay this tax was an amount less than R40 000 in the year 2017 and also in 2018 however if you make more than R40 000 within a year then you have to start preparing to be a tax payer at any offices of SARS.
Capital Gains Tax
Most people are having a dilemma when it comes to crypto currencies and gain capital, however we have explain few information about gain capital and you are the one to conclude whether crypto currencies are gain capital or not.
A capital gain Tax is shorten as (CGT) and is most popular by the shortened word. They include all profits acquired from the sale of capital assets such as vehicles, real estates and others. Capital Gains are only taxable when the capital assets are sold or disposed and are included in an individual or companies taxable income.