How Does Binary Options Tax Work?
Smart Traders are generating daily profits by using great strategies, money management on every trade. however some newbie traders are advised wrongfully and promised a world of profits without doing much.
These are brokers you should stay away from. Truth of the matter is you have to dedicate time and effort and learn all you can and invest with legit brokers. Doing this will ensure you have a smooth experience trading binary options. Binary options trading is not as easy as what people claim.
Binary Options Tax
Prior to the Cyprus Securities and Exchange Commission regulating binary option brokers, traders profits were taxed as gambling profits. CySEC in Cyprus is a regulatory board for binary option brokers. You must choose a broker who is regulated and licensed to be successful trading binary options. Below are the main types of taxes a binary option trader needs to consider (depends on country):
- Capital gains taxation.
- Income taxation.
- Gambling taxation.
You have to register with a broker that is reputable in South Africa in order to have a safe and carefree within this country. For instance IQoption is a fully regulated and licensed broker, more and more South African traders are using this popular and reasonably priced broker. Excellent customer service combined with great platform, assets selection and tiny start up capital makes them great for us and our weak Rand.
South African Binary Options Tax On Profits
If you treat Binary Options Trading as gambling without any knowledge or analysis. Your luck will run out. Trading the correct way will allow you to make decent profits. Now you will need to pay taxes on those profits in accordance to your countries Laws. Not certain on your countries tax laws ? South Africans can check with SARS (South African Revenue Service) to find out what taxes applies and how it works. Make sure to do things the right way as not paying taxes is a criminal offense.
The truth is when you make profits from trading binary options, it is necessary to pay taxes. The amount you will pay will be based on the tax bracket you fall in. If you aren’t sure, consult a tax practitioner as this will ensure you file in the right bracket so as to reduce overall tax liabilities.
Unregulated Mean No Taxes?
Simple answer is NO. South Africans sadly believe that since the industry is not regulated nationally it isn’t subject to our laws and taxation policies. Actually profits made from trading binary options must be filed with together with all yearly income to determine the tax bracket you will fall into.
Certain counties are tax havens and you wont be taxed on off shore profits. However South Africa charges tax on all profits that is deposited into South African Bank accounts. KYC (know your customer) and FICA (financial intelligence center act) needs to be in order too.
It is vital to be aware of the taxation laws in South Africa. Also ensure to keep a record of your income. Because binary options brokers aren’t required by law to provide you with any earnings statements. If you aren’t sure what can be deducted from your binary options trading profits, rather get advice from a tax practitioner.