SARS is coming after crypto traders South Africa

With SARS now sharing information with over 120 countries, it warned crypto traders and service providers to report their transactions, or face penalties for non-compliance.

This was explained by Tax Consulting SA’s Partner and Head of Strategic Engagement & Compliance, Jashwin Baijoo.

He warned that, following SARS’ implementation of the Crypto Asset Reporting Framework (CARF) on 01 March 2026, taxpayer uncertainty in this space has reached an all-time high.

To provide clarity and calm the masses of South African taxpayers engaging in crypto-related activity, SARS issued a media statement on 06 March 2026.

“Individual taxpayers do not report directly under the CARF and must continue declaring crypto asset transactions through their normal income tax returns,” SARS said.

On the flip side, Baijoo said Crypto Asset Service Providers (CASPs) must report certain crypto asset transaction information to SARS, which data may then also be exchanged with the over 120 other participating jurisdictions.

“This framework aims to combat offshore tax evasion and illicit activities linked to crypto-assets through enhanced multilateral cooperation and automatic information exchange.”

Baijoo cautioned that South African taxpayers involved in crypto transactions or holding digital assets should anticipate increased scrutiny and enhanced information sharing among tax authorities.

This means that it is essential for them to ensure precise tax reporting and compliance in their income tax returns.

“The same due consideration, if not a higher degree, must also be had when considering Financial Emigration from South Africa, and holding crypto-assets – Capital Gains Tax on Crypto Assets is real.”

Baijoo noted that the investigation into South African taxpayers’ offshore interests has long been on SARS’s radar.

Foreign asset/income disclosure notices have been issued as far back as 2020, entailing a blanket disclosure of offshore assets.

The knock-on effect is the promotion of automatic exchange of information, imposing legal reporting obligations on the respective revenue authorities and CASPs.

“For service providers, the CARF provides clarity, consistency and a level playing field,” SSRS said in its recent media statement.

“For the tax system, it strengthens fairness, early risk detection and voluntary compliance. The CARF marks an important step towards a modern, transparent and globally aligned tax system.”

At the time, Baijoo said many taxpayers may have thought best to hide the revenue authority’s request under their mattresses.

“But now, there appears to be no escape for the non-compliant South African taxpayer, especially with crypto asset transactions hot on SARS’ radar.”

Coming clean with SARS

To aid taxpayers in their quest for compliance, SARS has specifically included line items pertaining to crypto in individual tax returns, as a friendly reminder to taxpayers.

SARS specifically asks taxpayers to answer whether they have disposed of any local and foreign capital assets attracting capital gain or loss, “including crypto asset(s)”.

Under normal income tax rules, Baijoo explained that crypto-asset income can be taxed as “gross income” or as “capital in nature.”

Notably, and especially if there is a “bull market”, taxpayers, under specific circumstances, are entitled to claim expenses associated with the crypto asset receipts or accruals.

This may be done provided “such expenditure is incurred in the production of the taxpayer’s income and for purposes of trade”.

Where taxpayers opt to invest and hold their crypto-assets long-term, upon disposal, any gain or loss must be declared as part of the taxpayer’s taxable income.

“The onus is on taxpayers to declare all crypto assets-related taxable income in the tax year in which it is received or accrued,” SARS warned. “Failure to do so could result in interest and penalties.”

Fortunately, Baijoo said, there are various legal solutions available to taxpayers who want to rectify historical non-compliance or ensure their current compliance record remains unblemished.

“The most proactive way to affect this disclosure is by means of a Voluntary Disclosure Programme (“VDP”) application.”

“The VDP application allows you to legally declare any undeclared income/gains, but not be subject to the penalties which would generally stem from such a non-disclosure.”

The 2026 Budget Speech has further proposed that taxpayers may, in addition, apply for a separate remission of interest. This proposed amendment will take effect from 01 March 2026.

“This is the first prize from a compliance perspective and should be considered as a priority for all taxpayers who have not yet received any formal correspondence from SARS, pinpointing a specific liability owed.”

Where taxpayers find themselves on the wrong side of SARS, Baijoo encouraged them to take advantage of the first-mover advantage.

They can do so by seeking appropriate tax advice and ensuring the necessary steps are taken to protect themselves and their crypto-assets from incurring penalties for non-compliance.

“However, where things do go wrong, SARS must be engaged legally, and we generally find them utmost agreeable where a correct tax strategy is followed.”