The South African Revenue Service (SARS) will continue to apply “normal income tax rules” to cryptocurrencies such as bitcoin and has urged taxpayers to declare cryptocurrency gains or losses as part of their taxable income, Moneyweb reported.
“The growing popularity of cryptocurrencies such as bitcoin and ethereum and the rollercoaster ride some of these have experienced over the past year, have increasingly resulted in questions about their tax treatment in the local context,” said Moneyweb.
In a statement released last Friday SARS said it was in discussions with several top technology companies globally to enable it to track cryptocurrency trades more efficiently.
“Increased attentiveness and speculation regarding the future of cryptocurrencies has prompted calls … to provide direction as to how cryptocurrencies should be treated for tax purposes,” stated SARS.
In the interim, the existing tax framework suffices in guiding taxpayers on the tax implications of cryptocurrencies and it is unnecessary to issue a separate Interpretation Note at this point.
“Taxpayers who are uncertain about specific transactions involving cryptocurrencies may seek guidance from SARS through channels such as Binding Private Rulings (depending on the nature of the transaction),” said SARS. (via African News Agency)