Deducting From The Dream

Bitcoin and other cryptocurrencies may soon be in the sights of the revenue services

- Christopher Renwick

Although usually behind the global curve, South Africa seems to be keeping pace with the current bitcoin trend. This is positive, as we are living in an increasingly digital world with it only having been a matter of time before currency too became digital.

The big question on everyone’s lips, however, is twofold: how will cryptocurrency be taxed by the South African Revenue Service (SARS) and what will the exchange control standpoint of the South African Reserve Bank (SARB) be?

SARB has been the first of the two bodies to comment. Its view is that cryptocurrency does not fall within the ambit of their regulatory compliance. The Position Paper on Virtual Currencies 2014 is the last position paper issued by SARB on this topic and it has maintained that cryptocurrencies are decentralised convertible virtual currencies (DCVCs), which are not regarded as legal tender.