Bitcoin / Cryptocurrency- I hold Bitcoin / Cryptocurrency in a Bitcoin / Cryptocurrency wallet and exchange them for another currency (Rands) when I arrive in South Africa to pay for my Gautrain. Surely, AGAIN, I am not subject to taxation on any “currency gain” that may have notionally taken place when I acquired the Bitcoin / Cryptocurrency in my Bitcoin / Cryptocurrency wallet a while ago, and now use it to buy the Gautrain service in Rand value? I don’t think some of the world’s taxation authorities see it that way.
Why should it be different? Unless you are a currency trader, you do not pay tax on currency gains when exchanging one currency for another. Why should it be different for Bitcoin / Cryptocurrencies?
The answer may lie in the definitions. Is Bitcoin / Cryptocurrencies defined as an asset or a currency? If Bitcoin / Cryptocurrencies are not defined as an asset or a currency, is it closer to an asset or a currency? Of course, if you are trading in it, the typical income taxation provisions would seek to tax any trading income. This would be the case for normal currency traders.
These are interesting points to consider if you hold and convert Cryptocurrencies such as Bitcoin or use Cryptocurrencies such as Bitcoin itself to pay for services and goods. The fact that payment is for example in Bitcoin, should you pay tax on the value it now holds, long after you acquired the currency! Surely not?