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According to reports, the SA Revenue Service (Sars) is talking to top technology companies from around the world to find out how it can track cryptocurrency trades more effectively.
Experts believe that Sars is looking into ways to tax traders who buy and sell bitcoin.
Marc Sevitz, director and chief financial officer of TaxTim, an online platform that helps consumers with their tax returns, says: “Since bitcoin exists in cyberspace and is not monitored by any government, Sars doesn’t yet have the technology to track it, but this is something it is working on.”
Sevitz explains that bitcoin itself won’t be taxed, but tax will apply once the cryptocurrency is sold and converted to rands.
“Sars has issued guidance stating bitcoin is to be treated as a normal share trade.
"So if you are trading it for revenue purposes, the gains and losses will be treated as a revenue transaction and taxed, similar to a salary.
"If you hold it for investment purposes, this would be treated as if it was a normal capital gain on sale.”
