CAPE TOWN - Earlier this year, the South African Revenue Service (Sars) said it planed to provide clarity on the tax implications relating to the transactions of cryptocurrencies, in either an interpretation or practice note.
Sars spokesperson, Sandile Mamela told the media that Sars would be looking at the implications of virtual currency on its tax base.
“We are currently having exploratory discussions with other jurisdictions and will continue to explore options in the coming year,” said Memela. He added that Sars is currently treating cryptocurrencies under the Capital Gains Tax (CGT).
This, however, would be an area the revenue body needs to explore further, Mamela said. According to previous reports, South African Reserve Bank (Sarb) started testing a number of regulations related to Bitcoin and other cryptocurrencies in 2017.
This was followed by a December report in which Sars said it was in discussions with a number of technology companies to enable it to track cryptocurrency trades more efficiently.
“As you can imagine it is very difficult – the blockchain technology. Without revealing too much – we are talking to some of the top technology companies in the world that are doing similar work for Canada and the UK and we are hoping to get that technology,” said Dr Randall Carolissen, SARS group executive for research in December.
Carolissen said Sars is working through the Organisation for Economic Cooperation and Development’s (OECD) recommendations, which include detailed information on how cryptocurrencies should be treated.
Carolissen noted however, that Sars had yet to receive any major cryptocurrency declaration.
- BUSINESS REPORT ONLINE