If you are thinking of buying – or have bought – any “crypto assets” such as a crypto currency like Bitcoin, Ethereum, Polkadot, Solana (or any of the many other crypto currencies springing up all over the place), be aware of the tax implications.
For a new “from the horse’s mouth” perspective, read SARS’ webpage “Crypto Assets and Tax” here, first published on 27 August 2021 and providing guidance on (at date of writing – expect this webpage to evolve!) these questions –
What is it?
A crypto asset is a digital representation of value that is not issued by a central bank, but is traded, transferred and stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility, and applies cryptography techniques in the underlying technology.
According to the Explanatory Memorandum on the Taxation Laws Amendment Bill as issued on 20 January 2021 the word “cryptocurrency” was replaced with “crypto asset” in line with the proposed adoption of a uniform definition of crypto assets within the South African regulatory framework.
How did we get here?
Do I need to pay tax on crypto assets?
Do I need to pay tax on crypto assets?
How will it work? (With an example of the ITR12 Income Tax Return for the 2020/21 tax year)
How is SARS tracing crypto asset transactions?
There are still grey areas here – and many pitfalls – so be sure to take specific professional advice!
“The future of money is digital currency” (Bill Gates)
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
