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We believe there is a better way. We are an accounting, tax and business consulting firm based in Stellenbosch.

We believe there is a better way. We are an accounting, tax and business consulting firm based in Stellenbosch.

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How is crypto currency such as Bitcoin taxed in South Africa?

How is crypto currency such as Bitcoin taxed in South Africa?

Please note that the information below is an opinion and cannot be used to rely on as formal tax advice. In order to  obtain formal tax advice regarding your tax situation, please contact us directly for a consultation.

For the lazy reader I start with a summary:

It is my opinion that Bitcoin will be classified as an asset for tax purposes in the current ambit of the income tax act.It is my opinion that the gains made on the sale of Bitcoin will be taxed as trading income (except in the unlikely case where it was held as a long term investment where it will be taxed as capital gains).See the example at the end of the article.The View of SARS

SARS has not given their interpretation for the specific tax treatment of cryptocurrency yet. There is a common misconception that this means that no tax has to be paid on cryptocurrency gains. This is not the case, as the income tax act does make provision for gains on cryptocurrency albeit not directly. According to an article published by IOL, in Personal Finance, SARS has made their current position clear “Transactions or speculation in Bitcoin is subject to the general principles of South African tax law and taxed accordingly” (https://www.iol.co.za/personal-finance/youre-liable-for-tax-on-bitcoin-gains-11508366).

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