Cryptos to Be Taxed in South Africa

August 10, 2018 Taxation in South Africa

TokenBorsaPRETORIA – New rules being pushed by South African tax authorities will see cryptocurrencies be subject to income tax but not VAT.

The South African Revenue Service (SARS) is pushing for new regulation which would see a tax imposed on cryptocurrency.

Under current regulation in South Africa, cryptocurrencies are not considered to be currency in regards to the calculation of liability for capital gains tax and income tax.

As cryptocurrency is not yet widely popular as a means of payment of exchange, there is not yet any significant push for any coins to be considered and treated as a currency.

The SARS is considering cryptocurrencies to be an intangible asset, and are to be taxed as an asset.

If the classification is ratified, trades of cryptocurrency will be subject to income tax, as would be any other asset which is traded.

However, as the coins will not be considered currency and as they are not considered to be financial services, the trade of coins to or from fiat currency will not be subject to VAT.