South Africa Offers A Project On The Taxation Of Cryptocurrencies
According to the recent reports the South African Revenue Service (SARS) has put forward a proposal to tax revenues derived from trade and operations with cryptocurrencies.
The report said that the proposal was first introduced in April, when the South African Revenue Service (SARS) announced its plans to tax digital currencies.
In accordance with the project, the South African Revenue Service (SARS) will continue to view digital currencies as intangible assets that are still subject to income tax. If the law is adopted, all South African holders or traders of cryptocurrencies must declare any profit or loss that they incur from the sale of assets as part of their taxable income.
However, what is more interesting, is that the word “currency” is not defined in South Africa’s Income Tax Act. Cryptocurrencies are therefore not considered to be as official South African tender nor is it widely accepted as a means of exchange or payment. This means that SARS does not consider cryptocurrencies as a currency for income tax purposes or Capital Gains Tax rather, they are regarded as assets of an intangible nature.
In terms of value added tax (VAT), the South African Revenue Service (SARS) said that operations with digital currencies are not subject to VAT. Issue, collection, sale, purchase, acquisition or transfer of ownership of cryptocurrencies are not covered by VAT.