Crypto Traders Targeted By South African Revenue Service, Work To Track Transactions
The South African Revenue Service is currently working to improve the way it tracks cryptocurrency traders and their transactions to determine if they are paying taxes. The service’s commissioner stated that the agency is looking to explore ways to identify parties that are profiting from trading digital assets to see if they are evading taxation.
The service is also seeking new methods to identify people who are trading cryptocurrencies so that they can establish whether they are avoiding income taxes.
According to Mark Kingon, the Commissioner’s authority,
“The key thing is identifying people who are trading 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.”
One of the most critical aspects, as the agency explains, is identification. Most trade digital assets using credit cards and once a noncompliant trader is identified, SARS can launch an investigation into the case. The agency also has procedures to identify traders.
As the commissioner explained,
“The world is getting smaller and we are getting far more people transacting in foreign jurisdiction.”
The Service also determined that crypto-related transaction profits are subject to the regular tax rules and it informed taxpayers that they were expected to include gains and losses from trading crypto in their taxable income reported on their tax returns.
SARS stated in April,
“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.”
Currently, cryptocurrency’s popularity in South Africa is growing and as a result, it is necessary for the Service to continue providing clarity concerning crypto taxation. The South African Treasury stated in July that it will issue several amendments to the country’s tax legislation.