Gretchen is an admitted Attorney, Conveyancer and Notary Public who completed the Advanced Masters degree in European and International Business Law at the University of Leiden, the Netherlands. Her dual interest in Business and Law is why she chose to combine her undergraduate studies with a Baccalaureus Commercial degree, majoring in Accountancy, at the North West University in Potchefstroom. It was during her postgraduate studies at the University of Leiden that she wrote her thesis based on Corporate Governance. Gretchen is employed as an Associate at the STBB Bedfordview branch where she is involved with the day-to-day tasks of running their property transfer department. She also has a particular affinity with giving training, therefore she enjoys giving legal updates and PDE training to estate agencies. In her private time, Gretchen enjoys travelling and exploring new destinations. She has recently taken up Ballroom and Latin lessons and aspires to perfect the Viennese Waltz.

Thought of the Week | Is your profit on bitcoin taxable?

With Bitcoin taking centre stage when it comes to cryptocurrencies, one cannot help but wonder how tax legislation will apply to something that governments have no control over and which exists in cyber space.

SARS’ research department seems to suggest that when Bitcoin comes into the “real world”, it will become subject to ordinary tax rules. Therefore, when proceeds are earned on Bitcoin transactions, one should differentiate between income tax and Capital Gains Tax liability. If there is an intention of a short term investment, then the profit may be treated under the normal income tax rules. However, if Bitcoin is held as an asset for several years, then the rules relating to Capital Gains Tax will apply.

Even more uncertainty clouds the VAT treatment of cryptocurrencies when it is held as trading stock. Current opinion is that VAT will apply and that traders must levy VAT on transactions. It has been argued that SARS is unlikely to introduce a separate tax for cryptocurrency, as the income tax laws are comprehensive enough to be made applicable.

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