South Africa Looks To Tax All Crypto Transactions
Hey Jesscitizens
We all knew this day would come, COVID has left our economy in tatters, and with governments around the world making loans or printing money hand over fist to keep the debt bubble from imploding, they were always going to look at new forms of revenue.
Crypto had so far been off and to the side, a bunch of weirdos on the internet trading make-believe money online. Now in 2020 with Bitcoin continuing to rally governments all over the world are looking at this piece of the pie and rubbing their itchy palms at the thought of those tasty gains.
How crypto previously worked in SA
In the past, South African's were only liable for capital gains when the crypto was turned into Rands and deposited into your bank account. This made it easy to manage and makes sense; if you're moving back into fiat, you should be playing by their rules.
As FinTech and DE-FI begin to allow purchasing directly in crypto and loans and other financial services, bypassing the banks crypto users will find less need to move directly into fiat.
Now the rules have changed, and South Africa is moving to ALL crypto transactions becoming taxable events.
A tax disclosure obligation does not only arise where a cash balance is withdrawn from a trading platform – all transactions that have been made (whether a transaction of cryptocurrency for money or cryptocurrency for another cryptocurrency) must be disclosed to SARS.
What happens if you don't disclose your crypto trades?
This means that a taxpayer who fails to disclose their income from Bitcoin or other cryptocurrencies correctly may be convicted for an offence and be liable to a fine or imprisonment for up to two years.
This is pretty harsh if you think about many of these trades could be paper/unrealised gains in a market that is so small and filled with rampant speculation.
Probably only the beginning
I am sure as the number next to the BTC ticker moves higher and higher, governments are going to come down harder on cryptocurrency investors. Depending on the size of your bags, you may get away with paying a few pennies or having to consult a professional to reduce your tax burden.
Then for some who have really made off like bandits in any of the last bull runs, you may need to reconsider your status as a South African citizen.
I hate to make sweeping generalisations, but a large majority of cryptocurrency investors are primarily smart, young and pretty pissed off generation. They would hold very little allegiance to the nation if they had to choose between the country and their profits.
The harder they push these folks; the more will pack up and move, eroding the tax base even further.
Source:
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What do you good people of HIVE think?
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They're banning Crypto trading in Nigeria so nothing would be more worse than that. Africa is going back into the stone age. While the rest of the world is moving farther
Nothing a one way flight ticket can't fix, slowly getting to that realisation myself.
That's guaranteed because of hive and other crypto currencies keeping people in Nigeria alive and afloat earning money! It’s crazy but I think it’s only the beginning of these criminals. They don’t like competition so they just outlaw it altogether. We will always find a way though!
The P2P market for crypto in Nigeria is the second biggest in the world! They can ban it but it would only trade at a premium and yes make it harder to use!
I'm also sure any border towns may become popular places where you can swap your BTC for another counties fiat and then bring that in
As you said it's only a speed bump people are motivated and will find their way around it! Those with bigger bags though, will have to go where they are treated best
With time people would obviously find their way around. The situation in South Africa isn't as pleasant either. At the end it's about entirely leaving the country. P2P in Nigeria is huge you're right, but scammy people too have gotten into the mix.
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I wonder how long this ban will last, India has banned it and then 180'd and then banned it again, China did the same and 180'd, so I wonder how long Nigeria will hold out.
Oh, I can't even imagine, just when we thought people can get away from the remittance and money lending thugs.
You're right, they obviously don't like that competition that's why they didn't even feel like regulating but outright ban. It's time to leave the country though.
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it's almost as if they want people to stay poor
It sure does look like it, its not as if there are so many people in South Africa holding crypto that its this infinite source of income and we're all hiding money away from them, the value extracted versus the admin probably doesn't even make sense.
Also, why would you want your smartest, youngest and disgruntled people to build up resources, then you can't control them
Dinosaurs protecting their rotten and worthless eggs!
Greedy grubby paws have been waiting till this started to become viable, they never bothered to look at it previously. Typical governments taking your hard earned earnings to squander if country had a good track record in helping growth one would not feel so annoyed. Deductions; offset cost of purchase, learning, time spent online, cost of data, etc, etc 😃.
Younger generation if planning to move, leave it in crypto move and draw down as needed wherever you go.
If the country had a good track record of growth they wouldn't need additional tax income lol, they eroding their tax base not growing it!
If they serious about innovation and growing the economy wouldn’t it be better to allow less restrictions allow these South Africans to build wealth that they would then spend into the economy, create jobs and build businesses?
Nope give it to us because we’re broke!
How???
You print the money and inflate away our savings and you still have the balls to ask us for more tax it’s madness
Between the NATS and the ANC they have placed the whole country into a leaking bucket, actually the bottom of the bucket has dropped out, no longer a leak!
Screwed if you do and screwed if you don't is the situation we are all in now. Small business already covered by too many laws/taxes, poor entrepreneurs are floundering just trying to make head or tail of it.
Gatvol is best description, eating away into everyone's pocket with one hand, taking under the table handouts with the other, no pride, no trust, no ways....
oh, I am so gatvol, just when you think you can carve out a little bit for yourself they try to pickpocket you as if they didn't force us to these avenues in the first place.
I get that others won't be bothered by this, they'll just pay and move on but I'm seriously annoyed by this flip flop all of a sudden
Greed is going to come from every which way now.... they are broke!
Also pissed off with the situation since I checked way back when and they still had no clue what crypto was. Try use as much as possible online to pay anything over borders or bring in small denominations.
Welcome to the Bumbahole tax club! Do you guys get an allowance before you have to pay cap gains tax? In the UK we get £12,300 allowance before we need to declare gains. After speaking to HMRC the other day, it's worth making a note and declaring your losses for a tax year as it will count towards your overall amount if you do make another trade.
All in on Malta?
The yearly exclusion for capital gains here is R40 000 or $2700 which is retarded when you're inflating the currency to shit everything goes up basically, our broad money supply has increased 12% A year for the last 12 on average so you can see there's very little marginal room to go make viable gains without tax
At least with US,UK,EUR the inflation on the currency is not that high so you still have breathing room
Malta is looking better and better everyday!
Cheese, that allowance is nothing! In the UK, negative interest rates are on the cards but now we're not in Europe, BoE can call the shots instead of ECB so we've avoided that for now. Not that it matters seeing as every affordable £ is going to the fiat vacuum that is BTC!
I know a few good places in Malta, let's start eyeing up a move when we're actually allowed to fly out!
Sounds like operation exist strategy needs to be sped up, I'll start doing my research so I know what I'm in for, the work I do I can basically do anywhere as long as cost of living is reasonable I’m good to go!
Yeah, getting a remote job that can be done anywhere is something I'm looking to until we can all live off passively from BTC interest! Until then, Operation Exit Strategy activity has been ramped up!
Jesus that is not good news, I note below you have a tiny tax allowance too.
Good luck sorting all those HE and Splinterlands transactions!
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Not at all, it's a joke really they trying to apply rules to things they don't bother to understand yet! When money is stateless and boarderless, how can you apply your rules to it?
It's going to be an admin nightmare I'd rather take the admin of moving somewhere else
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STOPCheck out the last post from @hivebuzz:
Stricter regulations are going to arise, we basically haven't seen anything yet from these governments full of greed and determinatned to keep the monopoly power.
I see a situation where regulations are going to be thrown at us and we will be throwing back means of beating them to their games. Blockchain tech will always give you options.
Time to start looking at crypto friendly nations out there!
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That's what I'm afraid of that it's only the beginning and they going to fuck this up like they've done with so many other things so I want to get infront of it
I'm already speaking to tax professionals and immigration peeps, I need to know what my options are because we don't know how bad this can get
I kept it pretty simply since I just buy and HODL but still need to make sure my bags are secured
Likewise me, I remain a HODLer for now, my bags are not worth spending for now so I'm at the accumulation phase, however we should be looking at options of spending our ALTs without being abused by the greedy lawmakers.
What do you know about Trust with regards to funds? I know a bit about them when it comes to securing your property.
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What do you mean by trust?
Truts actually is the right spelling. Trusts is a way of entrusting your assets to trustee, so basically you own them but don't own them. Yours assets can't be seized by creditors etc.
My knowledge on "Trusts" is very minute, not sure if crypto assets fits in.
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Oh I don't know much about that, I'll have to look into it but also what is the restrictions on having a trust if I can take it with me to any country then Thats cool
Move to crypto friendly country, that's going to be the option to exit all the prohibition we are being dealt with.
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No no no! Not happy to read this, but I would definitely be claiming for depreciation of PC etc, Home Office space costs, Internet costs which is high when one had an unstable connection etc etc. Where else can they grab money? Really annoying!
Don't forget all the fees you pay on chain to move crypto and to purchase from exchanges! If you have an RA or tax free savings account make sure you top it each year to the max of R30 000 so you can use that + your R20 000 cap gains threshold to give you some breathing space
Thank you for that advice @chekohler! Have a great (hot) weekend further;)
Taxman want every penny/cent out of your account.
They have started marking their moves now 😩
They don't want you to have anything for yourself you took all the risk but they want the rewards
Good luck to them as I am not disclosing one cent to these bastards. I have not taken 1 cent out and if I do it ain't coming to this country. I have plans and they don't involve SARS as if push comes to a shove I will register my account as a business in a tax friendly environment. The more it becomes worth the easier that possibility becomes.
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The details aren't very clear yet like is it only KYC exchange purchases and how you set out your losses in the bear years vs the good years since I mean I was in at 2017 when BTC went from 20k - 3 that's some serious losses there
I feel this change makes things overly complicated! I was fine with pay when you cash out because all I do is buy and HODL so this just seems like a way to make it unattractive to invest in crypto and to keep your fiat so they can plunder it
Looks like a one way street straight to their pockets and one I wont get involved in. Having bank accounts outside the country will bypass this and why I kept mine open.
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Yeah, im with you on that, a mix of foreign capital, Bitcoin in a cold wallet and some physical gold and silver, can't go wrong really take what you can hold onto without anyone sniffing around looking for a hand out because some random piece of paper you didn't agree to says so,
Sucks for you in SA man, but thankfully it seems like you're able to do what you can for work in many different locations as long as you've got a decent internet connection. I wouldn't be shocked if they started getting pissed about that fact and started killing internet connections. Whatever they can do to control the little peons!
I'm getting my stuff together to try and get up to a full bitcoin, maybe a little more, before I stop wasting time altogether on the major exchanges and open markets. I checked my transactions a while ago and saw that I made the awesome move of snagging more than one Ethereum when it was 90$! Shit does that seem like an insane price now lol but that's what happens sometimes! Would be great if Bitcoin came back down to ~20k so we can get closer to that dream of 1 full one. I'm still stacking Sat's though regardless, so that doesn't change.
I don't know a lot about it but Namibia in Africa there might be a decent place, they saw through all the 'Rona stupidity when the president of the country I think it was showed that a fruit tested positive according to the mainstream test for it lmao
lol we have horrible internet I pay like $60 a month for 10 MBPS line that usually gives you between 3 and 8 if you lucky, we supposed to be getting fibre but even that is capped and you can’t get the full access yet as they try to milk what they can out of us for shit service
I really don’t want to have to jump ship but man are they making it hard for me to consider staying here.
Dude these prices are nuts I am 0.03 away from 1 coin but it keeps moving further and further away each month we back up to 40k now lol I’d love a 20k right now for sure
I am banking on 30k as the new floor once we correct and the bull marker is done so regardless of where it goes if it hits that range I’m getting in
All this tax stuff also makes it pointless to get into Alts since you just add more admin to manage
Lol Namibia is cool but it’s got no people in it even on a good day, it’s just dry ass dessert for most of it. I guess it is an option I do have 1 client from there! But wouldn’t be my first choice to be honest
Yeah true, I don't know much about the country but that doesn't sound very attractive. Malta sounds a lot nicer, I think you mentioned to Nickey!
That's some shitty internet for sure. I pay like 150$ a month for some package shit and they say it's 100 MBPS internet but most days it's around 20 or 30. Of course right now when I want to shit on these crooks they are giving me a decent connection but this is not the case 90% of the time!
That's amazing man, you're so close! I'm trying to stay low for the moment and waiting to see what happens with the market. The more transactions I do with these fluctuations, the more the crooks-RS want to siphon off some money. It's only a matter of time though before it comes back down. Of course I sold my bigger chunk of bitcoin at like 37~ but no sense in buying back in now, once it drops back down to 30 I'll still be up on the investment.
The country I'll ask for a new citizenship will be crypto friendly for sure.
SA just added to my ban list :)
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It's a beautiful country and you can really get value for money when you bring your dollars and euros over and live like a king but as for having any sort of wealth here looks like there's no point!
We still very much believe government knows best no ones going to contest this or push back
I can relate a lot to that. Same situation in my country, capable people understand they have to go away to make money.
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they started to fuck things up.. I heard that in Nigeria they banned cryptos or something.
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Yip, they’re totally screwing the pooch on this one, a whole lot of wealthy crypto owners are going to in the move from africa in the near future
economical refugees! but these time will be wealthy ones :P
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Is that means if you transfer crypto from one wallet to other wallet will also be liable for tax?
No this means if I have $100 of BTC and I swap it for HIVE and that hive goes to $200 you need to pay tax on those trades too
Every country will do the same if they haven't done so already.
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I sure hope not, where would I run to? Lol some counties have to think for themselves and see this as a way to attract investment and business to improve their country without the need to tax anyone