Today I was chatting with my friend wo I helped last year get involved in crypto by staking COTI. His stake is doing very well and we plan to farm his rewards on Friday. He as at least listened and not fiddled around so he is learning from his previous mistakes.
He wants to add more stake due to the price dip and kind of talked him out of it for now. The problem I have is I am not sure how the tax man is being alerted by those who are in crypto. I know if you deposit or withdraw less than R10K which is only around $550 you remain under the radar.
The new tax year for him is the end of March so I suggested we look at buying in some more then and who knows what the price will be then, but guaranteed we are going to have more dips happening at regular intervals from now until the peak later in the year. The importance of not being highlighted is what is important here and not necessarily how much you make especially if you have no intention of being the profit back to this tax jurisdiction.
When he eventually sells is stake R9900 will come back via the same route which is the exact amount that was deposited last year. There will be no red flags and no profit so there should be no tax paid. I do have another route for him to use that does not include regular banks and have someone who will convert his cash into crypto and deposit on the exchange for him. Having contacts like this does help you remain in the shadows for much longer and possibly never being detected. He will eventually off ramp in Dubai as I am the one guiding him through this.
I am also fortunate that I have only once used FIAT into crypto and also roughly the same amount under the flagging R10K. Being conscious of your crypto foot print is something I have been aware of from day one and I have been fortunate enough on the way to not have to cash out Crypto to FIAT as I would be liable to pay full tax as all my crypto is profit.
In SA they have an exclusion of R40K which is roughly $2K and all profits from investing, staking are taxed at 40% which is a little rude lol. Trading crypto is between 18 and 45% and depends on how successful you were. In theory if I was an honest human being I would need to give the tax man 40 HIVE from every 100 HIVE I earn and that is not happening. My 145K HP would suddenly become 87K HP after handing over 58K HIVE and why this is just absurd.
Looking at my portfolio even though the prices are seriously down I cannot imagine paying 40% or roughly $30k to the tax man and why I have made other plans. Between having an off ramp in Dubai and the underworld contacts who use crypto these days I think I am completely covered for now as this is all about protecting the values you have.
I do believe that once we see the crypto values rise the tax man will become far more interested in what we are doing and this will be a given and not an if, but a when. We are lucky being involved on HIVE as it does give us a route to earn more crypto that is not considered normal and is out of the tax mans reach.
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