SARS Targets Crypto Traders for Tax Compliance

The South African Revenue Service (SARS) is intensifying its efforts to ensure that cryptocurrency traders comply with tax regulations, according to an article in BusinessTech. Tax experts from Tax Consulting SA have highlighted that all crypto transactions need to be reported, even if they haven't been converted to traditional cash:

• Crypto as Taxable Income: In South Africa, profits from cryptocurrencies are treated as financial instruments under tax laws, meaning they're subject to income or capital gains tax.

• Various Taxes May Apply: Depending on your trading activities, you could be liable for capital gains tax if you're holding crypto as an investment or income tax for frequent trading, with rates up to 45% for individuals.

• Every Transaction is Taxable: Swaps between cryptocurrencies and any usage of crypto for purchases are considered taxable events.

• SARS Enhancing Tracking: SARS is using data sharing and international collaborations to identify undeclared crypto earnings, capable of investigating transactions beyond the five-year standard period if evasion is suspected.

• Permissions for Foreign Platforms: Trading on international platforms may require specific authorizations from the South African Reserve Bank, which many traders overlook.

As SARS strengthens its monitoring and compliance measures, crypto traders are advised to ensure all their transactions are fully declared to avoid potential penalties and back taxes.