Page 45 - Q&A 2019/2020

thereby eradicating the application of VAT-input claims on acquisition and
corresponding VAT-output charges being levied on disposals. This amendment
came into effect on 1 April 2019.

3. Cryptocurrency held as capital investments
Unlike the aforementioned Income Tax and Value Added Tax amendments
which predominantly apply to cryptocurrencies traded proactively, investment
into cryptocurrency with the intention to hold such as capital assets (for a period
Commercial Any profit made upon realisation of a cryptocurrency investment will result
longer than three years) will largely remain unaffected by the Amendment Act.
in income tax on capital gain being payable at your marginal rate and any
capital loss incurred will ensure that such loss can, in future, be set off against
potential capital gains realised from cryptocurrency investment.

Since cryptocurrency is a dynamic concept attracting both active traders and
passive investors, one can expect the regulatory prescripts to continuously be
amended as loopholes in the application and investment of cryptocurrency
comes to the fore.

It would be prudent to timeously address any legal and taxation implications
arising from the Amendment Act in respect of your current portfolio with your
legal or tax advisor.

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