Authorities in South Africa Announce Intent to Tax Cryptocurrency Profits

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The authorities of the Republic of South Africa will charge all types of transactions with digital currencies with a profit tax. This is stated in the statement of the Federal Service of South African Revenue Services (SARS).

As noted in the document, the tax base will serve any cryptocurrency income, including compensation for miners, income from the sale of goods and services, as well as profit from trading operations.

“The taxpayer is obliged to declare the income related to the cryptocurrency in the tax year in which it was received or accrued. Failure to comply with this requirement may result in fines and penalties,” the ministry said in a statement.

It is noteworthy that digital currencies in South Africa have no official status, the term “crypto” is not in the local income tax law. Nevertheless, South African Revenue Services treats them as intangible assets.

Also in the statement it is noted that this year SARS will clarify the issues related to the taxation of transactions with the cryptocurrency value-added tax.

Among other things, the other day it became known that the South African Reserve Bank will create a self-regulatory organization to monitor the development of the cryptocurrency and the fintech industry. This non-governmental organization have the authority to establish rules and industry standards.

Within the framework of the so-called Project Khoka, the organization will also study the capabilities of the corporate-oriented Ethereum-platform ‘Quorum’ for interbank settlements and clearing operations.

Bitcoin’s rapid growth in popularity garnered the attention of the South African government and other regulatory authorities South Africa which follows the trend of other countries attempting to tax and regulate Bitcoin.

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