Reports suggest that South African cryptocurrency traders are now receiving notifications from the South African Revenue Service (SARS) informing them that their tax matters are currently being reviewed. SARS is collecting data from various cryptocurrency exchanges in order to evaluate compliance. Traders who fail to provide the requested information may face criminal charges under the Tax Administration Act. SARS is also considering investigating cases where individuals have not previously declared their cryptocurrency holdings. Tax Consulting SA advises that cryptocurrency traders should not assume that any past non-compliance will go unnoticed. However, SARS has not provided clear guidance on whether cryptocurrency transactions should be classified as capital gains or income. As a result, it remains challenging for traders to accurately record their gains and losses on both local and foreign cryptocurrency exchanges.
