There was a time when bitcoin was used by criminals and it was known as an illegal currency but after launching bitcoin in the market, investors and traders have gone mad for it. In four years bitcoin has shown great potential and value which increased it’s demand on peak last year.
In December 2017 bitcoin value was at its peak and investors were loving it how bitcoin is helping them in making a great fortune out of their investment. But now the tax is getting launched on bitcoin and people of South Africa should be prepared for it.
Not bitcoin is subject to tax principles after the regulations by Reserve bank. The question is bitcoin really an asset or is it just a currency to spend? South Africa reserve don’t accept bitcoin as a legal tender till now due to the safety and transaction issues in which bank is not involved.
Now bitcoin users have to pay tax on every bitcoin they have. Taxpayers who are not going to declare their profits will be under 200% fine which is an absolute loss for them. Tax department said in an article “Where bitcoin is used as consideration for the supply of goods or services, and it is determined that bitcoin may be viewed as an asset rather than currency for VAT, the trade would likely be akin to a barter transaction.”
In the US bitcoin traders have a facility to file their tax on bitcoin through software coin-tracking. Coin-tracking is free for you up to the 200 transactions while other software for tax filing named Bitcoin.tax is free for you up to the 100 transactions. The tax on bitcoin depends on the factor that for how long you hold it and what is the current price of the bitcoin.
It seems like a real asset now like a real currency which you can keep after all the legal proceedings and taxes.