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Foreign income with online forex trading

Posted 24 October 2019 under Tax Q&A


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Dawid says:
21 October 2019 at 13:28

How one would declare Income/Loss that is derived from online forex trading. The trading account is in USD so I assume foreign income.

1. Where would one declare this income/loss with TaxTim/eFiling tax return under foreign income?
2. Is it necessary to declare if only a loss was made?
3. Can withdrawal fees/currency exchange and bank fees be deducted from overall profit.
4. What documentation would SARS require? The only documentation that can be acquired from the trading platform is trading history showing profit/loss but no tax certificates.
5. Would this account be seen as an Asset under Foreign Assets/Liabilities

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TaxTim TaxTim says:
22 October 2019 at 7:47

1. Seeing as you were trading from South Africa, this is regarded as local business income.
2. If you want to set future profits off against your current loss I suggest that you declare the loss to SARS.
3. Should they not already be included in the total expenses on your trading history you can definitely claim it as expenses.
4. Your trading history is sufficient.
5. Yes it will need to be entered in this section too.

You need to declare what you invested as your business income and the total expenses as the cost of sales, the difference should be your loss.

Dawid says:
23 October 2019 at 22:35

Just to confirm, the trading is done with an overseas broker. Money is deposited/withdraw via an offshore account and then to the local bank which sees this as international payments. Would this then still be regarded as local business income?

TaxTim TaxTim says:
24 October 2019 at 7:34

Yes it will still be regarded as local Income as you were based in South Africa while you earned the income.


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