- Title
- A critical analysis of the tax treatment of cryptocurrencies in a South African context
- Creator
- Ho, Dau-Ming
- Subject
- Cryptocurrencies Taxation
- Subject
- Income tax Law and legislation South Africa
- Subject
- Income tax Law and legislation Australia
- Subject
- Financial services industry Security measures
- Subject
- South Africa. Income Tax Act, 1962
- Date Issued
- 2022-10-14
- Date
- 2022-10-14
- Type
- Academic theses
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10962/357504
- Identifier
- vital:64749
- Description
- The aim of the present research was to investigate whether, as claimed by the South African Revenue Service in the media release issued in April 2018, the normal income tax provisions could apply to cryptocurrency transactions. To achieve this aim, a literature review was undertaken to describe the nature of cryptocurrencies and related crypto mining activities, providing definitions of cryptocurrencies, blockchains and crypto mining, as well as describing the functioning of the system. The research then proceeded to analyse the provisions of the definition of “gross income” in section 1 of the Income Tax Act, 58 of 1962, as amended, and the requirements of the “general deduction formula” in terms of the preamble to section 11, section 11(a) and section 23(g), as applying to cryptocurrency transactions. The application of other provisions in the Act to cryptocurrency transactions was analysed, including trading stock in terms of section 22, and capital allowances in terms of sections 11(e), 12C and 13quin of the Act, together with capital gains tax consequences in terms of the Eighth Schedule to the Income Tax Act. The regulation for income tax purposes of cryptocurrency transactions in Australia was discussed, with a view to making similar recommendations in South Africa. The research was situated in the interpretative paradigm, a doctrinal methodology was applied, together with a qualitative analysis of documentary data. The discussion was limited to the income tax consequences of cryptocurrencies as applying to individuals. The findings of the research were that, in general, the normal income tax provisions could apply to cryptocurrency transactions, but based on the analysis of the South African and Australian income tax acts as they apply to cryptocurrencies, it was recommended that a Comprehensive Guide on the income tax consequences of cryptocurrency transactions should be issued by the South African Revenue Service, together with amendments to section 25D and paragraph 43 of the Eighth Schedule to the Income Tax Act to deal with the conversion of cryptocurrencies to Rand values, and to section 9C of the Income Tax Act to include the deemed capital nature of the disposal of cryptocurrencies in the three-year rule presently applying to equity shares.
- Description
- Thesis (MCom) -- Faculty of Commerce, Accounting, 2022
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (108 pages)
- Format
- Publisher
- Rhodes University
- Publisher
- Faculty of Commerce, Accounting
- Language
- English
- Rights
- Ho, Dau-Ming
- Rights
- Use of this resource is governed by the terms and conditions of the Creative Commons "Attribution-NonCommercial-ShareAlike" License (http://creativecommons.org/licenses/by-nc-sa/2.0/)
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | HO-MCOM-TR22-145.pdf | 1 MB | Adobe Acrobat PDF | View Details Download |