Forex trading, seen as income, is subject to taxation in numerous countries, including South Africa.Traders understand that local brokerage involvement in South Africa requires tax payments, while they mistakenly believe that trading with foreign brokers exempts them from tax obligations. Essentially, it's not about where the money comes from, but rather the individual's residency when earning that income.
Since paying tax is an obligation in South Africa, trading with a tax-friendly broker matters a lot. By focusing on these three primary criteria, we were able to narrow the field of tax forex brokers in South Africa down to seven top options.
Regulation: To legally offer brokerage services in South Africa, brokers need to be registered with the Financial Sector Conduct Authority (FSCA), the primary regulatory body. FSCA-regulated brokers are well-versed in the country's tax policies and often offer tax reports and specialized tax calculator tools.
Transparent trading fees: Operating within a transparent fee structure, brokers refrain from hidden fees, simplifying the calculation of trading earnings for traders. Additionally, several forex brokers often offer professional profit calculators for their clients, enhancing the trading experience.
Professional Tax Instructions: Some forex brokers, particularly those reputable and strictly regulated ones, provide professional tax guidance to assist clients in legally reducing tax obligations. Additionally, some brokers offer tax-friendly or tax-advantaged trading accounts, aiming to help traders lower their trading costs. Notably, these provisions do not exempt traders from paying taxes but assist in reducing overall expenses.
Now, let's explore this leaderboard to gain a comprehensive understanding of taxes in South Africa and discover the best tax-friendly brokers available here.
Best Tax-Friendly Forex Brokers in South Africa
7/24 Instant withdrawal, decent multilingual customer service.
Metatrader platforms with VPS, boosting smooth trading experience.
Operates under two tier-1 regulators , with a long operation history of over 20 years.
Advanced trading features, social trading and algo trading provided.
$30 welcome bonus, attractive to new traders.
TickMill VPS and copy trading offered for superb trading environment.
more
Comparison of the Best Tax-Friendly Forex Brokers in South Africa
Forex Broker
License
Minimum Spread
Maximum Leverage
Minimum Deposit
Open account
Details
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Best Tax-Friendly Forex Brokers in South Africa Overall
| Broker | Logo | Why are they listed as the Best Tax-Friendly Forex Brokers in South Africa？ |
| Exness |  |
✅ Regulated both internationally and by FSCA in South Africa, which gives them insight into local tax policies. ✅ Transparent fee structure, no hidden fees, besides, they also providing professional investmnet culcalator, making clients know where their taxes should be paid. ✅Exness extends professional tax advisory services, providing traders with valuable insights into this aspect. |
| FXCM |  |
✅ Gaining regulatory license from FSCA, legally operating within this country, more professional on tax policy here. ✅ Offering traders tax reports and calculators for easier tax calculations. ✅ Low trading cost and transparent fee model, making clients trade forex with more confidence. |
| TickMill |  |
✅A broker with solid reputation, also regulated by FSCA, knows clearly about SARS tax policy. ✅A high rating of 4.5 out of 5 based on 2,000 reviews on its transparent trading fees, no hidden fees. ✅Professional forex tools, helping traders calculate their profits more easily. |
| CPT Markets |  |
✅ A well-established broker operating in South Africa for years, regulated by FSCA, a big advantage for traders within this country. ✅ Spreads as low as 0.7 pips, low commisisons, one of the most competitive brokers in the industry. ✅ Providing professional tax guidance for traders in South Africa, enabling them to better understand the tax rates they will incur. |
| Klips |  |
✅Strictly regulated by FSCA, giving traders in South Africa a high level of risk when trading forex. ✅ Low trading fees, and professional profit calculator tools for clients to calculate profits easily. ✅Supplying tax guidance for traders in South Africa. |
| IUX Markets |  |
✅ Operate legally in South Africa under FSCA regulation, know clearly about tax pocliy here. ✅ Compeititive trading fees and transparent fee structure, and, receving much compliments recently. ✅Transparent fees structure, with added explanation that where taxes are invovled. |
| VT Markets |  |
✅A FSCA-regulated broker has operated in South Africa for years, tax polices here all well-known to this broker. ✅ Provide tax reports and professional tax instructions for clients to help clients to know this. ✅ Competitive and transparent trading fees, with a dedicated account manager to give traders professional instructions. |
Exness
Overall: ⭐⭐⭐⭐⭐
Regulations: CYSEC (Cyprus), FSCA( South Africa), FCA (UK), FSA (Seychelles)
With a solid track record spanning over 15 years in the forex industry, Exness is an established online forex broker that is subject to stringent regulations all around the world, including those of South Africa's Financial Services Commission (FSCA). Among the many great features of this broker, its genuineness as a broker providing the easiest possible way for its clients to trade—with a low minimum deposit, quick withdrawals, and helpful customer service representatives who are fluent in multiple languages—is what sets it apart.To show why this broker is still a major player in the forex market, let's look at its October 2023 performance: $4.8 trillion in trading volume, 700,000 active traders, and $1.71 billion in client withdrawals.
| ✅Pros | ❌Cons |
| • Globally and heavily regulated | • Withdrawals through bankcards up to 10 bussiness days |
| • Free demo trading | • Tired administration fees applied, from $10 to $150 per lot |
| • Competitive trading fees | |
| • Social trading accounts offered | |
| • Metatrader platforms with VPS | |
| • 7/24 Instant withdrawal | |
| • 11 languages available, covering major languages globally |
FXCM
Overall: ⭐⭐⭐⭐⭐
Regulations: ASIC (Australia), FCA (UK), CYSEC (Cyprus), FSCA (South Africa)
FXCM, an Australia-based broker with a good operation of over 20 years, an influential player in the forex industry. Heavily regulated, including FSCA in South Africa, which can give traders within this country double trading confidence. Traders rave about FXCM's precise trading signals, and the platform's innovative features—such as social trading and algo trading—put it at the top of its class. Additionally, FXCM offers Tradingview Pro live trading integration, which is a feature not often seen among other brokers.
| ✅Pros | ❌Cons |
| • Operates under two tier-1 regulators | • No 7/24 customer service, only 5/24 |
| • A good operation of over 20 years | • No Online chat for direct communication |
| • Competitive trading fees | |
| • Social trading and Algo trading provided | |
| • Tradingview Pro integration available | |
| • Accurate trading signals, praised by traders |
TickMill
Overall: ⭐⭐⭐⭐
Regulations: FCA (UK), CYSEC (Cyprus), FSCA (South Africa), LFSA (Malaysia)
With 60 currency pairings, 15 indices, 500 stocks and ETFs, and other trading instruments including Cryptos, Futures, and Options, TickMill expands its product offering beyond what other brokers usually provide. TickMill excels in offering a wide range of high-quality training resources, such as webinars, seminars, video tutorials, autochartist, virtual private servers, and more. There are 10 different deposit and withdrawal paths for clients to make payments easily and quickly.
| ✅Pros | ❌Cons |
| • Heavily regulated with a good reputation | • No 7/24 customer service |
| • Competitive pricing | |
| • Tickmill VPS Offered | |
| • Copy trading available | |
| • $30 welcome bonus | |
| • Four base currencies available, including USD, EUR, GBP, ZAR | |
| • Average execution speed 0.20 sec |
CPT Markets
Overall: ⭐⭐⭐⭐
Regulations: FCA (UK), FSC ( Belize), FSCA ( South Africa)
CPT Markets is a broker born offshore yet with a solid reputation. Regulated aboard by FCA in UK, and FSC in Belize, it also locally operated by FSCA in South Africa to operate leaglly within this country. Highly recognized by traders here, CPT Markets operate in a transparent way,with no hidden fees, and it also provides access to MetaTrader 4, MetaTrader 5 and cTrader. So far, CPT Markets serve 350,000 worldwide, executing 165,000 traders daily.
| ✅Pros | ❌Cons |
| • Strong Regulatory framework to serve clients better | • Customer support only available 5/24 |
| • Flexible leverage options | |
| • Competitive spreads | |
| • Average Execution speed at 0.3 seconds | |
| • $0 to open a classic account | |
| • Demo account for a 30-day trial period |
Klips
Overall: ⭐⭐⭐⭐
Regulations: CYSEC (Cyprus), FSCA ( South Africa)
Compared with many other well-established players in the industry, obviously, Klips remains a young succeedor, with an operation history of 9 years only. However, the broker's robotic approach to trading stocks and currencies makes it stand apart. Klips is proud of its user-friendly and straightforward trading programme that lets clients mimic expert tactics with free signals.
| ✅Pros | ❌Cons |
| • Regulated by Cyprus and South Africa | • No online chat |
| • Free signals offered | |
| • Unlimited demo accounts with €100K in credits | |
| • Proprietary Klips trading app | |
| • Klips Academy offered | |
| • 7/24 customer support |
IUX Markets
Overall: ⭐⭐⭐⭐
Regulations: FSCA (South Africa)
IUX Markets is a relatively young broker compared with many other brokers, yet, its shines at several areas and favored by numerous traders, especially traders in South Africa. Firstly. CFDs trading on this platform features low-spread pricing, ideal for scalpers. Secondly, IUX Markets has a solid trading platform performance, with average order execution of under 30 ms, free low latency collocated VPS available. Thirdly, IUX Markets remain a popular choice for automated traders, with order matching engines located in the London Equiniex LD4 data center, processes over 500,000 trades per day with over 60% of all trades coming from automated trading systems.
| ✅Pros | ❌Cons |
| • Operating legally in South Africa | • Singlar regulation |
| • Low deposit and withdrawal threshold | |
| • Competitive fees | |
| • An ideal choice for automated trading | |
| • High leverage up to 3000:1 | |
| • Free deposits and withdrawal |
VT Markets
Overall: ⭐⭐⭐⭐
Regulations: FSCA (South Africa)
VT Markets is an Australia-based broker with an operation of 10 years. Although it lacks a multi-regulation framework, it still remains a popular option for a large number of brokers. The fast execution speed, low price, easy and quick account-opening process, and 7/24 customer service are some of VT Markets' distinguishing features. With over 200,000 users signing up for an account each month, the platform processes 4 million trades, with a potential monthly trading volume of $200 billion.
| ✅Pros | ❌Cons |
| • Legally operate in South Africa | • Need more regulations globally |
| • Access to various CFD shares | |
| • 5 base currencies available | |
| • Both MT4, MT5, VT Markets App provided | |
| • Promotion plans provided | |
| • Free trading tools |
Forex Trading Knowledge Questions and Answers
Do forex traders pay tax in South Africa?
The answer is Yes. South Africa follows a residence-based tax structure, wherein residents are liable to pay taxes on their global income, except for certain exclusions, regardless of where the income was earned. Conversely, non-residents are taxed solely on their income derived from a South African source.
Actually, the taxes of Forex trading profits in South Africa is relatively clear-cut. Profits acquired from an individual's trading account are subject to income tax, while profits generated by a business are subject to corporate income tax. Small businesses, the third type, are subject to a more lenient tax system with progressive rates comparable to income tax.
How much tax do traders have to pay in South Africa?
Profits made from forex trading by individuals are taxed as normal income in South Africa.Typically, tax rate for forex trading in South Africa based on how much traders earn and how they trade forex, personal income tax rates up to 45%.
Consider this example: Sizwe, a South African resident, engages in forex trading and managed to earn R250,000 in net profits after deducting his allowable expenses from his trading income last year.
If Sizwe's trading approach involves speculative short-term trades aimed at quick profits, his R250,000 forex income would be taxed according to his personal income tax rate. As his total taxable income falls within the bracket of R205,901 to R321,600, his forex profits would be taxed at a rate of 31% based on South African tax brackets. Consequently, Sizwe would be liable to pay R77,500 in taxes on his forex trading profits for the year.
In South Africa, personal income tax rates follow a tiered system, impacting the taxation of forex trading gains earned by individuals. In simple terms, higher forex incomes are subject to higher marginal tax rates.
| Annual Taxable Income | |
| R0 - R216,200 | 18% |
| R216,201 - R337,800 | 26% |
| R337,801 - R467,500 | 31% |
| R467,501 - R613,600 | 36% |
| R613,601 - R782,200 | 39% |
| R782,201 - R1,731,600 | 41% |
| Over R1,731,600 - 45% | 45% |
When traders face losses in forex trading, they can reduce the amount of money they're taxed on. It means if they lose money, they don't have to pay taxes on that lost amount. But there are rules about how much of these losses they can use to lower their taxes, set by SARS.
For forex traders in South Africa, maintaining precise records of their trading endeavors, including profits and losses, is imperative to guarantee accurate tax payments. Additionally, submitting tax returns to SARS by the tax year's end, slated for 28 February, is mandatory. Non-compliance with these tax obligations may lead to penalties and legal entanglements.
Why is an FSCA-regulated broker so important for taxable forex trading?
Being licensed with the Financial Sector Conduct Authority (FSCA) is crucial for both brokers and traders, offering a robust framework that focuses on tax compliance and trust-building in the financial domain.
Compliance with Tax Regulations: FSCA's mandate requires brokers to establish solid internal tax compliance protocols—ensuring adherence to national tax laws. This is like a safety net, safeguarding clients' tax compliance and guiding them through complex tax structures.
Provision of Tax Advisory Services: Regulated brokers must offer professional tax advisory services, aiding clients in legitimate tax planning. It's like having a guide, helping traders navigate through tax intricacies while staying within the legal boundaries.
Information Reporting System: Brokers are obligated to set up information collection and reporting systems as per FSCA standards. This streamlined approach simplifies clients' tax obligations by easing the reporting process. It's akin to providing a clear roadmap for tax authorities to validate information.
Enhanced Operational Transparency: FSCA's oversight ensures brokers' operational practices and fee structures become more transparent. This transparent environment enables clients to comprehend service levels and potential tax-related risks. It's like turning on a light, illuminating the potential risks and services offered by the broker.
Boost in Credibility: FSCA's regulatory oversight elevates brokers' credibility, fostering trust among clients. Particularly in complex cross-border tax services, this regulation boosts confidence and credibility. It's akin to a stamp of approval, assuring clients of the broker's reliability and trustworthiness.
What is the provisional tax?
Another tax associated with forex trading is known within taxation circles as provisional tax, involving a system where taxpayers make estimated payments of their tax liability in advance.
A provisional taxpayer is defined in paragraph 1 of the Fourth Schedule of the Income Tax Act, No.58 of 1962, as any:
Natural person who derives income, other than remuneration or an allowance or advance.
Any person receiving income (or to whom income accrues) other than regular remuneration are deemed provisional taxpayers. In most cases, individuals with a sole income source from a salary are typically non-provisional taxpayers.
How to avoid tax on forex trading in South Africa?
Note that if you are a resident in South Africa and continue to trade forex, you can not avoid tax on forex trading. In some cases, you can only reduce taxes legally through certain methods.
Holding Forex Profits Long Term: Suppose forex trading gains are held for more than 3 years before being realized. In that case, they qualify as capital gains, securing complete tax exemption in South Africa. This represents the most direct legal avenue to evade taxes on forex profits.
Consider John, who generated a R500,000 profit trading EUR/ZAR across 5 years. Opting for the long-term position, upon closing his trade, the entire R500,000 profit becomes tax-free.
Open Offshore Forex Accounts: When considering the legality of reducing taxes, opening a forex trading account with an offshore broker situated in a low-tax jurisdiction is a potential avenue. For instance, take Biko, who opted to open a forex account in Mauritius. He pays a mere 3% tax on profits, a notable contrast to 45% in South Africa, resulting in substantial savings on his R1.5 million annual gains. Yet, acknowledging the linked compliance risks is essential. Ensuring accurate reporting is pivotal in this scenario.
Tax Deductions: Leveraging annual tax deductions and credits has the potential to reduce the total owed tax amount. Take, for instance, Amahle, who deducted R15,000 for computer equipment purchases and R12,000 for annual forex newsletter subscription fees from her taxable income before calculating the taxes due.
What are tax-free countries for forex trading?
axes on forex trading are enforced in most countries. However, some nations stand out by not imposing taxes on these activities, presenting favorable circumstances for traders. These tax-free countries include destinations like the United Arab Emirates, Bahamas, Monaco, Turks and Caicos, Vanuatu, Brunei, Oman, and The British Virgin Islands, most of which are offshore territories. Though trading in a tax-free environment can offer advantages, it's crucial for traders to hire a regulated or licensed broker, anyway.
About WikiFX
On WikiFX.com, our evaluations of online forex brokers, along with their offerings and services, are derived from the data we've gathered and the informed insights and professional perspectives of our expert researchers.
We conduct a thorough review of each broker's regulatory compliance, commission rates and charges, minimum deposit needs, leverage availability, performance of the trading platform, and the speed of withdrawal processes. Through our technologically-backed assistance, we strive to ensure you have a solid understanding of these aspects.
We sincerely maintain an updated leaderboard of top brokers and offer extensive forex guides. With a catalog of over 50,000 brokers regulated by 30+ authorities,boosting confidence and simplifies trading experiences for your forex journey.
Disclaimer: All information published in this article is intended for informational purposes only, and it should not be considered as individual legal tax advice.
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