Cryptocurrency
I have just finished writing about the income tax, capital gains tax, and VAT effects of the receipt and supply of Bitcoin and other cryptocurrencies for the 2018 edition of Notes on South African Income Tax. It is quite interesting to see how the tax differs in each case. For example, while a person will pay income tax if that person trades in Bitcoin, there is no capital gains tax if Bitcoin is sold or spent as a capital asset. However, there is VAT if a VAT vendor pays in Bitcoin or sells Bitcoin. Depending on the circumstances, the sale or use of Bitcoin by a vendor may be standard rated (VAT at 14%) or zero rated (VAT at 0%). No doubt we will see some tax legislation change on this front at some time in the future.
Corporate & Commercial Attorney | Dual Qualified, LLB, LLM (Tax Law), Attorney, Conveyancer & Notary Public (RSA), Solicitor of England & Wales | Board Member | MBA Student
7 年I am writing a (hopeful) journal article on the taxation of Bitcoin, as well as from a BEPS perspective. I look forward to reading your work!
Tax Consultant & author of Notes on South African Income Tax
7 年Therefore use the dictionary definition of currency, i.e. a medium of exchange. Keep in mind that bitcoin derivatives will be differently treated.
Tax Consultant & author of Notes on South African Income Tax
7 年If held as a currency, it is excluded. There is no definition of currency in the Income Tax Act.
Infrastructure Private Equity
7 年Hi Phillip, what is the reason that CGT will not apply if held as a capital asset ?
Tax Consultant & author of Notes on South African Income Tax
7 年Interesting