SARS looks into identifying noncompliant cryptocurrency 'miners' | Fin24

SARS looks into identifying noncompliant cryptocurrency 'miners'

Aug 19 2018 06:03
Lesetja Malope

Acting SA Revenue Service (SARS) commissioner Mark Kingon said the organisation was looking into ways of identifying cryptocurrency traders who might be dodging tax.

Kingon was speaking at the Institute of Internal Auditors SA conference in Sandton this week. He said though the taxman expected tax to be paid on cryptocurrency gains, it was still trying to find a clear-cut way of identifying the traders.

“The key thing is identifying people who are trading because it’s easy to say cryptocurrency gains must be deductible, but there are also those who lose. That’s why it’s important to identify the trader,” he said.

He said once a noncompliant trader was identified, a query could be lodged with SARS and the individual could be investigated, especially since most traders used credit cards.

Kingon said SARS had certain ways of identifying traders, but there was no clear-cut way of tackling the issue as some had foreign bank accounts and might be transacting in foreign jurisdictions.

SARS applied the normal income tax rules to cryptocurrencies and expected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.

According to SARS, the onus was on the taxpayer to declare all cryptocurrency-related taxable income in the tax year in which it was received or accrued and failure would attract interest and penalties.

“In South Africa, the word ‘currency’ is not defined in the Income Tax Act. Cryptocurrencies are neither official South African tender nor widely used and accepted in South Africa as a medium of payment or exchange. As such, cryptocurrencies are not regarded by SARS as a currency for income tax purposes or capital gains tax.

"Instead, cryptocurrencies are regarded by SARS as assets of an intangible nature. While not constituting cash, cryptocurrencies can be valued to ascertain an amount received or accrued as envisaged in the definition of ‘gross income’ in the act,” read a statement from SARS issued earlier this year. * SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

sars  |  mark kingon  |  tax  |  cryptocurrencies


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