Crypto Crackdown: SARS’ Dedicated Unit Targets Traders
South Africa has one of the highest adoption rates of Bitcoin and other digital currencies in the world, with millions of citizens holding some form of crypto asset. SARS has taken notice, and the establishment of a specialised Crypto Asset Unit shows just how serious the revenue authority is about regulating and taxing these transactions.
How Crypto Assets Are Taxed in South Africa
Although crypto is not considered legal tender, transactions and speculation fall under normal tax law. Gains or losses from crypto trades must be declared in the year they accrue. Depending on the nature of the transaction, profits can be treated as income under “gross income” or as capital gains subject to CGT. Expenses directly linked to crypto activities may also be deductible if they are incurred in the production of income.
Scenarios That Create Tax Obligations
There are three main ways crypto activity creates tax consequences: mining, trading through exchanges or private deals, and using crypto for goods or services. Each of these is treated differently by SARS, but all carry a reporting obligation. The onus is on taxpayers to declare income and gains, regardless of whether transactions take place locally or globally.
Stricter Enforcement with New Crypto Tools
SARS has invested heavily in advanced analytics, machine learning, and data-sharing with exchanges to track crypto transactions. By forming global partnerships, SARS now receives detailed trading data across borders, leaving little room for non-compliance.
What Non-Compliance Could Cost You
Failing to declare crypto income can lead to audits, investigations, and penalties as high as 200%, plus interest. Legal action is also a possibility. Taxpayers caught out after SARS initiates enforcement cannot apply for the Voluntary Disclosure Programme (VDP).
How to Stay Protected
The safest step is to engage with professional accounting and tax experts. Specialists can help assess past liabilities, declare crypto transactions correctly, and guide you through voluntary disclosure if needed. With SARS watching more closely than ever, compliance isn’t optional-it’s essential.
