Changes to South African tax filing system result in lower crypto arbitrage – Taxes Bitcoin News

Reports from South Africa suggest that tax authorities have closed a loophole in the online tax filing system that allowed crypto arbitrage traders to make multiple purchases on overseas cryptocurrency platforms with just one permit. As a result of these optimizations, crypto arbitrage traders are now forced to submit a new application for each order. In addition, this change will also effectively exclude daily arbitrage deals.

Loophole blocked

As the Moneyweb report explains, some South African crypto traders are known to “benefit from price differences in crypto assets on local and overseas exchanges.” The price differences have been between zero and three percent in the last few months.

However, according to the report, South African crypto traders can take advantage of such differences with their nearly $ 700,000 (10 million rand) annual foreign investment grant (FIA). They can also benefit from these price differences with their Special Discretionary Allowance (SDA) of around 70,000 US dollars per year. However, a South Africa Revenue Service (SARS) tax clearance is required for dealers using their FIA clearance.

Once this initial approval is granted, crypto traders could obtain subsequent approvals “by going online and clicking an” update “pin button on the Sars website”. However, SARS has now updated its e-filing system and now “the pin stays the same every time the update button is pressed”.

Changes that affect the frequency of trades

Meanwhile, the Moneyweb report further reveals that a South African crypto exchange, Valr, has already notified its customers of the changes. Valr said:

As a result, updated FIA pins will not be accepted as valid pins for arbitrage trading purposes and a completely new FIA application will have to be made to continue arbitrage trading under FIA once the original FIA pin has been used up .

In addition, the exchange’s CEO Farzam Ehsani was quoted as warning customers that they must now “wait for approval of every FIA application before trading.” However, Jon Ovadia, CEO of Ovex, a cryptocurrency broker, is also cited to deny fears that the changes to the e-filing system could impact his business. He said:

We never used the automatic pin renewal system knowing that Sars didn’t like this system [even though it made it available to the public].

What do you think of the changes SARS made? Let us know what you think in the comments section below.

Photo credits: Shutterstock, Pixabay, Wiki Commons

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source https://bidsfor.me/changes-to-south-african-tax-filing-system-result-in-lower-crypto-arbitrage-taxes-bitcoin-news/

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