Monday , December 17 2018
Breaking News
Home / International Customs / South Africa / South Africa puts onus on taxpayers to declare all currency income
South Africa puts onus on taxpayers to declare all currency income

South Africa puts onus on taxpayers to declare all currency income

CAPE TOWN: The South African Revenue Service (SARS) announced on Friday that it expects everyone to declare cryptocurrency gains as part of their taxable income. “The onus is on taxpayers to declare all cryptocurrency-related taxable income in the tax year in which it is received or accrued. Failure to do so could result in interest and penalties.”

The SARS acknowledged that it faced many calls from the public to provide direction on how to treat cryptocurrency tax reporting but says that a separate interpenetration is unnecessary for now. Instead it tried to explain how it falls under the current framework. Anyone who is uncertain about specific transactions involving cryptocurrencies may also seek guidance from the agency.

The agency explains that cryptocurrencies are not regarded by SARS as a currency for income tax purposes or Capital Gains Tax, rather they are regarded as “assets of an intangible nature.” And, that “Whilst not constituting cash,” income received or accrued from cryptocurrency transactions can be taxed on revenue account under “gross income”. When goods or services are exchanged for cryptocurrencies, transactions are regarded as a barter.

On the positive side, South African taxpayers are also entitled to claim expenses associated with cryptocurrency accruals, “provided such expenditure is incurred in the production of the taxpayer’s income and for purposes of trade.” Additionally, SARS will not require VAT (Value-Added Tax) registration as a vendor for purposes of the supply of cryptocurrencies in 2018.