SARS looking to identify cryptocurrency traders who dodge taxes

Acting South African Revenue Service commissioner Mark Kingon has stated they are investigating how to clearly identify cryptocurrency traders.

According to a report by the City Press, Kingon said this was needed so anyone dodging taxes could be tracked.

While SARS expects users to pay tax on cryptocurrency trade gains, it was “still trying to find a clear-cut way of identifying the traders”.

“The key thing is identifying people who are trading, because it’s easy to say cryptocurrency gains must be deductible, but there are also those who lose. That’s why it’s important to identify the trader,” he said.

Kingon stated they do have ways to identify traders, but this is complicated by individuals using foreign bank accounts and transacting in foreign jurisdictions.

He added that the onus is on the taxpayer to declare all cryptocurrency-related taxable income.

SARS announced earlier this year that normal income tax rules apply to cryptocurrencies, meaning taxpayers must declare profits or losses as part of their taxable income.

Ettiene Retief, Chairman of the National Tax and SARS Committee at SAIPA, said that both profits and losses from cryptocurrency would be subject to tax – but either capital gains tax or income tax could apply.

Now read: Cryptocurrency miners dig deeper as Bitcoin falls

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SARS looking to identify cryptocurrency traders who dodge taxes