{"id":11647,"date":"2021-09-02T13:54:05","date_gmt":"2021-09-02T13:54:05","guid":{"rendered":"https:\/\/www.buyucoin.com\/crypto-labs\/south-african-tax-body-updates-crypto-tax-guidance-confusion-persists\/"},"modified":"2021-09-02T13:54:05","modified_gmt":"2021-09-02T13:54:05","slug":"south-african-tax-body-updates-crypto-tax-guidance-confusion-persists","status":"publish","type":"post","link":"https:\/\/www.buyucoin.com\/crypto-labs\/south-african-tax-body-updates-crypto-tax-guidance-confusion-persists\/","title":{"rendered":"South African Tax Body Updates Crypto Tax Guidance, Confusion Persists"},"content":{"rendered":"

In late August, the South African Revenue Service (SARS) released new guidelines that clarify the correct treatment of taxable crypto events. The new guidance, which was published on the revenue collector\u2019s webpage, explains how cryptocurrency-related income should be disclosed in tax returns.<\/strong><\/p>\n

Distinction Between Income and Capital Gains Tax<\/h2>\n

As shown<\/a> on SARS\u2019 crypto-asset tax webpage, \u201cincome received or accrued from crypto assets transactions can be taxed on revenue account under \u2018gross income.’\u201d Alternatively, the new guidance says such gains \u201cmay be regarded as capital in nature, as spelt out in the Eighth Schedule to the Act for taxation under the Capital Gains Tax (CGT) paradigm.\u201d<\/p>\n

SARS also reveals that \u201ctaxpayers are also entitled to claim expenses associated with crypto assets accruals or receipts, provided such expenditure is incurred in the production of the taxpayer\u2019s income and for purposes of trade.\u201d<\/p>\n

Meanwhile, a tax consulting firm, Tax Consulting SA, told to Bitcoin.com News in an email that the publication of the guidance should perhaps be best viewed in the context of the various comments recently made by SARS on the taxation of crypto assets.<\/p>\n

As previously reported<\/a> by Bitcoin.com News, South African crypto holders found on the wrong side of the law now face possible jail time. Similarly, Tax Consulting SA asserts that the new crypto asset tax guidance is another reminder of how SARS now sees crypto tax as an important revenue source and the extent to which it will go to enforce compliance.<\/p>\n

<\/p>\n

The Cost of Not Disclosing<\/h2>\n

Consequently, in its analysis of the new guidance, the Tax Consulting SA team says \u201call individuals who have acquired and held crypto assets during the tax year must disclose these holdings to SARS in their returns, regardless of whether any taxable events took place.\u201d The team cautions however that \u201cthis is easy to get wrong and taxpayers should be sure to tread carefully.\u201d Tax Consulting SA also warned:<\/p>\n

Where you do not make this disclosure, even negligently, this is now a criminal offence under the Tax Administration Act.<\/p>\n

Concerning the \u201cconfusion\u201d on whether a taxable event should be treated as income or capital gains tax, the consulting firm insists that the \u201cinformation published [by SARS] earlier this week only gives examples of capital gains tax disclosures.\u201d Also, since the revenue collector has not given examples of income tax disclosure, it \u201cmeans taxpayers may fall on the wrong side of the law by just following the guidance provided by SARS.\u201d<\/p>\n

Yet, despite this lack of clarity, Tax Consulting SA insists crypto holders still have to disclose because \u201cthere is no legitimate way for crypto asset investors to remain \u2018invisible\u2019 from a SARS perspective.\u201d The firm argues that \u201cnon-disclosure is permanent and [that this] will come back in a few years to catch up with the taxpayer.\u201d<\/p>\n

What are your views on SARS\u2019 latest crypto tax guidance? Tell us what you think in the comments section below. <\/strong><\/em><\/p>\n

Bitcoin News
\nTaxes, capital gains tax, Crypto tax, non-disclosure, South African crypto holders, South African Revenue Services, tax administration, Tax Consluting SA, taxpayers<\/p>\n","protected":false},"excerpt":{"rendered":"

In late August, the South African Revenue Service (SARS) released new guidelines that clarify the correct treatment of taxable crypto events. The new guidance, which was published on the revenue collector\u2019s webpage, explains how cryptocurrency-related income should be disclosed in tax returns. Distinction Between Income and Capital Gains Tax As shown on SARS\u2019 crypto-asset tax…<\/p>\n","protected":false},"author":0,"featured_media":11648,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53,3],"tags":[],"class_list":["post-11647","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-news","category-coin-news"],"_links":{"self":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/11647"}],"collection":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/comments?post=11647"}],"version-history":[{"count":0,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/11647\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media\/11648"}],"wp:attachment":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media?parent=11647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/categories?post=11647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/tags?post=11647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}