South Africa Expects Taxpayers To Declare Cryptocurrency Gains

Ali Raza
  • South Africa is now expecting its citizens to declare cryptocurrency-related gains for tax purposes
  • A review of this decision is expected in February

The South African Revenue Service, or SARS, has released an official statement in which it says normal tax rules apply to cryptocurrencies, meaning every South African who wishes to trade, or in any way deal with cryptos may have to pay an income tax.

Taxpayers are, naturally, required to clearly declare all of their losses and gains on the cryptocurrency market. Cryptocurrency earnings may be liable for capital gains tax (CGT) or may be treated under the country’s regular tax rules.

 SARS has stated that the onus to declare crypto-related taxable income is on taxpayers, and that failure to report income from cryptocurrencies can and will result in penalties and interest.

The organization revealed it realizes that many people might not be aware of what they need to do to pay taxes for their crypto investments. As such, SARS is set to provide taxpayers guidance through various channels.

The decision, SARS noted, was influenced by growing interest in cryptocurrencies. The statement reads:

“Increased attentiveness and speculation regarding the future of cryptocurrencies has prompted calls for SARS to provide direction as to how cryptocurrencies should be treated for tax purposes. However, as indicated in this media statement, there is an existing tax framework that can guide SARS and affected taxpayers on the tax implications of cryptocurrencies, making a separate Interpretation Note unnecessary for now.”

SARS

In South Africa, cryptocurrencies aren’t seen as legal tender and, as such, aren't widely accepted as a payment method. This, SARS argued, means they are considered assets, with no tangible nature.

Since cryptocurrencies don’t have a physical form and can't be used as cash, income received and accrued from cryptocurrencies transactions will be taxable under “gross income.”

On a positive side, SARS claims taxpayers are entitled to claim cryptocurrency-related expenses, “provided such expenditure is incurred in the production of the taxpayer’s income and for purpose of trade.” Additionally, it won’t require “VAT registration as a vendor for purposes of the supply of cryptocurrencies.

The organization revealed that in the 2018 budget review in February it’s set to further clarify the situation.

JPMorgan Chase Positively Wades Into Crypto After Years of Hate

Colin Muller
  • JPMorgan is now servicing Gemini and Coinbase
  • The move represents a full reversal of JPM's stance
  • Crypto is now deeply institutionalized

The financial services giant and bank JPMorgan Chase & Co have seemingly reversed on a long-held stance, that crypto is bad, by beginning to service U.S. cryptoasset exchanges Gemini and Coinbase.

JPMorgan’s apparent reversal comes after years of institutionalized disdain for crypto, with the bank’s CEO Jamie Dimon being a vociferous critic circa 2017. According to Bloomberg, JPMorgan had been conducting due diligence on the exchanges “for months” before making the move. The bank’s adoption of crypto signals what can only be a highly regulated crypto-fiat landscape.

During 2019, JPMorgan had in fact started to visibly thaw on the subject of crypto, even experimenting with their own distributed ledger tech in the form of the so-called “JPM Coin”.

Dimon displayed during an interview his awareness of the competition posed by crypto, directing his people to assume that crypto and/or Fintech was “coming [...] to eat your lunch.” Despite this, he was bearish on the prospect of Facebook’s Libra project succeeding or even launching, saying in October 2019 that it would “never happen”.

big dropJPM chart by TradingView

JPMorgan’s publically traded stock has fallen recently, retreating from all-time-highs set in December 2019 in February, even before the coronavirus pandemic started to wreck the markets in March. It is down about 37% from those highs, trading now at about $87.

Featured Image Credit: Photo via Pixabay.com