Tax on trading in your country
What you learn in 3 minutesA reader asked: who actually wants to hear about my trading, and what do I keep? In South Africa, trading profits are generally treated as either capital gains or revenue (income), depending on how often and how deliberately you trade. That difference matters in rand: a R10,000 gain taxed as revenue can cost you far more than the same R10,000 taxed as capital gain. This lesson shows the records to keep from your first trade, so you are not reconstructing them later.
1 trade on USD/ZAR: what R figures to keep
| Step | Amount | Note |
|---|---|---|
| Trade size | 0.10 lots (10,000 USD/ZAR units) | Standard lot is 100,000 units; 0.10 lot is 10,000 units. |
| Entry price | 18.4100 | The USD/ZAR rate when the trade opened. |
| Exit price | 18.4300 | The USD/ZAR rate when the trade closed. |
| Price move | 0.0200 rand (200 pips) | 18.4300 minus 18.4100 = 0.0200 rand. |
| Gross profit in rand | R200.00 | 10,000 units × 0.0200 rand = R200.00. |
| Broker spread cost (example) | R20.00 | A 2-pip spread on 10,000 units: 10,000 × 0.0020 = R20.00. Spreads vary by broker and market. |
| Net before tax | R180.00 | R200.00 gross minus R20.00 spread. |
Your broker may round prices, charge commission, swap or overnight financing, and quote a different spread. Those amounts vary between brokers and are not included above.
The mistake people make here
The common mistake is to treat trading as invisible until a large sum appears, then scramble for records. People mix personal and trading money in one bank account, lose the broker statements, and cannot show entry and exit dates. Instead, keep every contract note, monthly statement, and bank deposit from day one. If SARS asks, you need the date, the instrument, the rand amount, and the reason for the trade. A simple spreadsheet updated weekly is enough.Check yourself
You buy 0.10 lots of USD/ZAR at 18.4100 and sell at 18.4300. What is the gross rand profit?
0.0200 rand × 10,000 units = R200.00.
If the spread costs 2 pips on 10,000 units, what is the net before tax?
2 pips = 0.0020 rand × 10,000 = R20.00. R200.00 − R20.00 = R180.00.
Which South African authority generally wants to hear about trading results?
The South African Revenue Service (SARS). The FSCA regulates the market, not your tax return.
In South Africa
- Tax authority
- South African Revenue Service (SARS)
- Market regulator
- Financial Sector Conduct Authority (FSCA)
- Currency
- Rand, written R (ZAR)
- Common funding methods
- EFT, instant EFT and bank cards; availability varies by broker
- Tax treatment
- Trading profits may be treated as revenue or capital gains; the correct treatment depends on your circumstances and can vary