Sars and forex trading


Introduction to Forex Trading in South Africa Forex Trading History in South Africa Retail over the counter Forex trading in South Africa started 16 sars and forex trading ago when local companies started offering Forex trading facilities to self directed traders using offshore brokers.

At that time sars and forex trading were no regulations or restrictions prohibiting individuals or companies from starting their own online company. Sadly however, most companies eventually led to spectacular failures that cost South African Forex traders and investors hundreds sars and forex trading millions of Rands. This situation however was not unique to South Africa and similar fraud and greed occurred in most countries in the western world, forcing authorities to regulate these institutions more stringently.

It is therefore necessary and prudent for traders to check that the brokers they choose to deal with, are regulated in their respective countries and offer protection to traders and investors should that company close down.

Europe and other countries have their own regulatory authorities. It is perfectly legal for individual South Africans residents to trade the Forex Market, either sars and forex trading a local or overseas broker.

When trading through a local broker it is possible to trade with a rand denominated currency. The local platforms are not that great because the spreads are far wider than the offshore brokers.

These institutions are suitable for corporations or individuals who sars and forex trading unable to invest funds offshore due to exchange control regulations in force in South Africa.

This allowance is available to South African Tax Payers over the age of 18 years and can be invested in offshore investments, property, bank accounts or other types of investments.

SARS will also only issue clearance certificates to residents who are registered tax payers and whose tax liabilities are up to sars and forex trading and can prove the source of the funds they wish to invest offshore. Funds may only be transferred through your bank by presenting your clearance certificate from SARS and requesting your bank to do the transfer for you.

Banks and other financial institutions are obliged to establish the validity for offshore funds coming into or leaving the country and report to the South African Reserve Bank. Due to the limited facilities of trading platforms most individual traders elect to trade through an offshore broker, using the above procedure to transfer their funds to the brokers. Limited Local Trading Facilities Due to reserve bank regulations it is almost impossible for local financial institutions to offer true spot Forex retail trading facilities as the major Forex clearing houses are all based offshore, thus prohibiting the local institutions from complying sars and forex trading daily settlement regulations.

Offshore Forex brokers are reliant upon major clearing houses to provide liquidity and protect the broker from unnecessary risk. Forex brokers who offer trading facilities to retail clients without the support of liquidity providers often rely upon the trader losing his money in order to turn a profit and can be prone to price manipulation, stop hunting, and slippage to ensure that novice traders soon lost most of their capital.

Brokers traditionally make their money from the bid ask spread each time a trader enters a trade. The trade is then immediately passed on to one of their liquidity providers via STP or straight through processing who then assumes the ultimate risk should the trader make money; thus limiting the risk of the broker. This also protects the trader as the broker has no need to use unscrupulous methods to ensure the trader loses his money. The more money the trader has the more money the broker ultimately makes and the longer they both stay in the trading business.

Large financial sars and forex trading like some of our top banks are forced to deal with offshore brokers to offer retail OTC Over the Counter facilities to South African Forex traders. About Introducing Brokers An introducing broker is a person or institution who earns a commission from a broker for introducing their product to other traders.

What is Fundamental Analysis? Introduction to Forex Trading Forex Trading History in South Africa Retail over the counter Forex trading in South Africa started 16 years ago when local companies started offering Forex trading facilities to self directed traders using offshore brokers.

Kindly what tax implication are there in forex trading and when do they apply. Glad to help you with your question. FOREX is therefore your trading stock. You buy and sell it for a profit. The first part of the definition says: Bear in mind that foreign currency options contracts and foreign exchange contracts both defined in section 24I are specifically excluded from the definition of trading stock.

Foreign currency is not sars and forex trading from sars and forex trading definition of trading stock. When you sell the forex, that will be gross income as defined in section 1. Any opening and closing stock balances at the beginning or end of the year of assessment will be treated according to sections 22 1 and 22 2 ; i. In essence, you are taxed on your profit from trading. However, section 24I is also applicable.

It deals with the gains and losses from foreign exchange transactions. Exchange item includes a unit of currency. The exchange difference definition in substance requires that you calculate the gain or loss on the currency bought and sold. You should convert that gain to rands using the exchange rates applicable on the day the currency was bought and sars and forex trading. The profit from the trade will be added to taxable income while the loss will decrease taxable income.

In the case where the currency was bought but remains unsold at the end of a tax year, you would calculate the rand value of the currency at the time you bought it. The gain or loss sars and forex trading would also be included in taxable income. From the above you can see that both sections 24I and sections 22 and 25D are applicable. The answer lies in section 24I 6: Therefore section 24I applies instead of sections 22 and 25D.

TaxStudents Staff answered 4 years ago. Popular Taxchats Can one claim advertising expenses once off website design as a deductible expense under the general deductions formula? Upcoming Events None found.