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SARS, bitcoin wallets and disbursement of BTC funds

Posted 21 March 2016 under Tax Questions



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RobG says:
21 March 2016 at 11:27

However, there are a number of issues that I cannot get to grips with regarding the storage of BTC in a wallet and the further use of BTC outside the fiat system:

1) If I moved my BTC to a wallet provider outside of SA (blockchain, based in Luxembourg but servicing globally) does SARS see this as an offshore transaction? as:
a) The wallet provider is not a registered global institution as such. b) No interest is accumulated to this wallet / amount, so no income is generated.

2) If SARS does see this as such, how would one proceed as at the time (and still possibly at present):
a) there were not many well known, secure wallet services providers in SA.
b) transferring BTC to a hardware wallet and storing at home in SA, was not an option as this hardware technology was not considered that secure / reliable at the time.
c) the wallet industry was and still is unregulated so SARS could not insist on the use of a local wallet provider without taking some responsibility for the security of the contents thereof.

3) Would it be a prudent option to transfer funds into my own personal hardware wallet now?
a) and how would SARS view this transfer given the above?

4) How would SARS respond if at some stage I decide to redeem BTC, not for fiat currency (which would incur a capital gain or loss) but for services provided (locally or internationally) such as:
a) Air fare, travel, hospitality.
b) Purchases from merchants, agents, online goods.
c) Purchases of property (land), or goods of a capital nature such as a motor vehicle etc.

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TaxTimTaxTim says:
21 March 2016 at 13:18

You would need to consult with SARS on this matter as it is a relatively new aspect of Tax treatment and they would have the binding answers until we get more guidance from them.


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