The question that comes to mind is why would such a Team-up be necessary; the answer quite simply – to detect and remedy historic non-compliance pertaining to crypto asset trading!
Excerpt from pg.3 of the SARS Request for Information, pertaining to crypto asset transactions
SARS’ Automatic Exchange of Information with Crypto Asset Exchanges
For years, crypto asset traders have transacted under the misconception that their crypto-related profits fall outside the domain of SARS, and if they don’t tell, how will SARS ever know…
Unfortunately for those too busy monitoring bear and bull markets, a pivotal shift has been missed. SARS have confirmed that, similarly to how they may demand transactional records from banks, they may very well do the same with crypto asset exchanges:
Excerpt from pg.1 of the SARS Request for Information, pertaining to crypto asset transactions
Criminals in the Crypto-verse
Those who hold, or have ever held, crypto, should certainly not assume that historical non-declaration means that SARS will not look to tax these profits in future. SARS has made it very clear that no stone will be left unturned in fulfilling their mandate to collect revenue, by whatever means necessary.
Not only will a review of this historical transgressions be conducted but should the crypto trader under the radar not comply, severe penalties, or even jail-time is immediately on the cards, per section 234 of the Tax Administration Act, 28 of 2011:
Excerpt from pg.2 of the SARS Request for Information, pertaining to crypto asset transactions
Practically, this means that even though taxpayers are requested to make full disclosures to SARS on local & foreign crypto transactions, this is more for verification, than data gathering purposes.
While taxpayers falsely assume that what they do not disclose, remains so, they are sorely mistaken and under-estimate SARS’ non-discriminate approach to the eradication of non-compliance.
Giving credence to a total compliance crackdown, SARS has secured a number of recent tax fraud convictions, ranging from the infamous Chef Sizo, DJ Ganyani and other celebrities, to Doctors and their practices, such as Doctor Care Centre Incorporate!
Help Us, Help You Avoid Penalties, and Prosecution
Now is not the time to hide your crime – due to the intangible and uncertain nature of crypto-asset transactions, it is market best practice to seek the guidance of a specialised tax attorney. This will aid in not only ascertaining the classification of specific crypto assets and transactions, but also ensure you are fully protected under legal professional privilege.
Not only will this place you in a better position of knowledge, but when the correct tax and legal strategy is followed, pro-actively, it will ensure both historic and current compliance with SARS.
Should SARS have already contacted you on any inaccuracy or concomitant liability arising from your cryptocurrency transactions, this should be immediately addressed, by a multi-faceted team of professionals. This expert intervention will not only serve to safeguard you against SARS implementing punitive measures, but also being specialists in their own right, you will be correctly advised on the most appropriate solution to ensure your tax compliance.
