South Africans can declare cryptocurrency-related taxable income under standard rules, the country’s tax agency has said.
In a statement issued on Friday, the South African Revenue Service (SARS) clarified its stance on tax treatment of cryptocurrencies, explaining that taxpayers who have either traded, received or mined cryptocurrencies are expected to report gains or losses
“There is an existing tax framework that can guide SARS and affected taxpayers on the tax implications of cryptocurrencies, making a separate Interpretation Note unnecessary for now,” the revenue service said.
SARS added that the “onus is on taxpayers to declare all cryptocurrency-related taxable income in the tax year in which it is received or accrued. Failure to do so could result in interest and penalties.”
However, expenses associated with cryptocurrency accruals or receipts may be deductible during the tax reporting process under certain conditions.
The notice comes as a result of the agency noting increasing levels of popularity and speculation around cryptocurrencies, which subsequently led to an investigation into the tax consequences of the technology. Consequently, it categorized cryptocurrency as an “intangible asset” for income tax or CGT purposes.
Finally, the agency said it currently does not apply value added tax (VAT) on cryptocurrency sales. A move to clarify the situation was promised in the 2018 budget review in February.
South African rands image via Shutterstock
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