SARS issues draft crypto tax guidance, seeks comments by August 31

The guidance says existing tax rules apply to crypto disposals and offshore holdings, while tougher business reporting under the Crypto-Asset Reporting Framework is due from March 2026.

Summary

The South African Revenue Service published draft guidance on June 30 setting out how existing tax rules apply to cryptocurrency transactions, stressing that it does not introduce a new tax. The document treats crypto as an asset rather than legal tender or foreign currency, meaning transactions fall under the 1962 Income Tax Act and the capital gains tax framework. SARS said disposals such as sales, crypto-to-crypto swaps, and payments for goods or services are generally subject to income tax or capital gains tax, while holdings on offshore exchanges and in offshore wallets must be declared as part of worldwide income. The revenue authority is inviting public comment through August 31 before issuing a final version. It also said reporting obligations for businesses will be strengthened under the Crypto-Asset Reporting Framework from March 2026.

Terms & Concepts
  • capital gains tax: Tax on profit made when an asset is sold or otherwise disposed of.
  • Crypto-Asset Reporting Framework: A reporting standard designed to improve tax disclosure on crypto-asset transactions and holdings.
  • worldwide income: A tax approach under which residents must declare income and certain holdings from both domestic and offshore sources.