Gareth Grobler discusses the implications of buying, trading, and selling Bitcoin and other cryptocurrencies in South Africa with local experts Wiehann Olivier and Tertius Troost. Wiehann is a partner and Tertius is an international tax manager at well-known audit, tax, and advisory firm Mazars.
Some of the questions we explore are:
* Why does SARS believe they have the right to decide how much my bitcoin is worth in order to work out TAX liability? How do they propose to do this?
* Why do governments believe they have a right to a share of gains made trading bitcoin when they have no influence, no jurisdiction, and no input or facilitation to the bitcoin network?
* Who decides what a taxable event is in terms of bitcoin changing hands? Is there any case law in terms of tax liability for crypto in South Africa?
* If I have bitcoin that I have earned, and it has never touched any exchange, it is sitting in my own wallet, should I declare it, and if so why? If it is declared, do I need to pay tax on it since it is bitcoin and not Rand?
*If I only earn bitcoin online (no fiat currency), and do not convert that bitcoin to Rand, instead I spend it using a USD based bitcoin debit card. Do I need to declare that, and if I do, what is the procedure since there is never a Rand value for the bitcoin, and it has never entered any bank account?
* If I charge someone 0.1 BTC for a service, and do not convert the BTC to Rand….and keep that for 5 years and have not converted it yet….should I declare that, and if so, What would the procedure be when declaring that considering its income but not converted to ZAR.
* Similarly, if I have mined bitcoin, (did not buy it anywhere), and that is still sitting in a wallet untouched for 5 years. What would be the best way to declare that since it was generated, and has not been traded for any fiat value yet.
* If I want to financially emigrate, I understand all SA assets need to be sold and declared….so what happens with bitcoin, since it resides in cyberspace, and not ‘in’ SA?
* If I buy bitcoin for R100k locally and send it to a US-based exchange. Then when the price goes to R300k I sell it on a foreign exchange outside of S.A. to USD, not Rand. The price tanks 50% and I can buy back more bitcoin than I had before with the USD. How would I go about declaring those transactions and how would the tax on that work?
You can reach out to Mazars via their website https://www.mazars.co.za/Home/Contact-us/Use-this-form-to-make-contact
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