The South African Revenue Service (SARS) has significantly
escalated its efforts to enhance tax compliance in the crypto
sector by issuing tax notices and clarifying exchange control
regulations.
Normal income tax rules apply to crypto assets and affected
taxpayers need to declare crypto assets' gains or losses as
part of their taxable income. The onus is on taxpayers to declare
all crypto assets-related taxable income in the tax year in which
it is received or accrued. Failure to do so could result in
interest and penalties.
Following normal income tax rules, income received or accrued
from crypto assets transactions can be taxed on revenue account
under 'gross income'. Alternatively, such gains may be
regarded as capital in nature. Taxpayers are entitled to claim
expenses associated with crypto assets accruals or receipts,
provided such expenditure is incurred in the production of the
taxpayer's income and for purposes of trade.
