South Africa’s tax agency has told taxpayers that cryptocurrency-related income will fall under normal tax rules and may also be liable for capital gains tax.
The South African Revenue Service (SARS) has reminded taxpayers that the onus is entirely on them to declare cryptocurrency gains or losses as part of their taxable income. Crypto-related gains or losses can occur through mining or trading, purchasing cryptocurrency at exchanges and their usage as payments in transactions, the taxation agency said on Friday.
While cryptocurrencies aren’t seen as a ‘currency’ by SARS for income tax purposes, they are deemed as ‘assets of an intangible nature,’ SARS clarified. Gains from cryptocurrency-related investments and holding ‘may be regarded as capital in nature’ in certain scenarios while taxpayers are also entitled to claim expenses and deductions from cryptocurrency accruals or receipts.