SARS Regulates Stringent Tax Policies For Cryptocurrency Traders
August 20, 2018 12:59 pm
According to the South African Agency, improvements are being made to track cryptocurrency traders to verify if the taxes are being paid. The Commissioner revealed that the agency is coming up advanced methodologies to closely identify those that are profiting from trading digital assets and check if they are avoiding taxation.
At a conference conducted by the Institute of Internal Auditors in Sandton this week, the acting Commissioner of the authority,
Mark Kingon said that the key thing is recognizing people those who trade because it’s easy to say cryptocurrency gains must be deductible, but there are also those who lose. That’s why it’s important to identify the trader.
The Commissioner added that many of the traders purchase digital assets using credit cards. Identification is the foremost issue, and a very crucial aspect emphasized the official also adding that SARS can launch an inquiry into the matter.
Earlier this year, the SARS had decided to regularise tax rules for incomes and profits from crypto-related transactions. The taxpayers were asked to include gains and losses that occurred during crypto trading in the taxable income reported on their tax returns.
SARS has given warnings previously, stating :
“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.”
After passing this statement, the authorities seem to have received several calls to clarify the matter and provide guidance on reporting crypto incomes for taxation purposes. It also requested no separate interpenetration of the regulations was needed.
The demand of cryptocurrencies is continuing to grow among South Africans and in the region as a whole, and the requirement for clarity in regards to crypto taxation has increased. In July, the South African Treasury put forward several reforms to the country’s tax legislation including, according to local media reports, a proposal to release crypto traders from VAT (value-added tax).