In late August, the South African Revenue Service (SARS) released new guidelines that clarify the correct treatment of taxable crypto events. The new guidance, which was published on the revenue collector’s webpage, explains how cryptocurrency-related income should be disclosed in tax returns.
Distinction Between Income and Capital Gains Tax
As shown on SARS’ crypto-asset tax webpage, “income received or accrued from crypto assets transactions can be taxed on revenue account under ‘gross income.’” Alternatively, the new guidance says such gains “may be regarded as capital in nature, as spelt out in the Eighth Schedule to the Act for taxation under the Capital Gains Tax (CGT) paradigm.”
SARS also reveals that “taxpayers are also entitled to claim expenses associated with crypto assets accruals or receipts, provided such expenditure is incurred in the production of the taxpayer’s income and for purposes of trade.”
Meanwhile, a tax consulting firm, Tax Consulting SA, told to Bitcoin.com News in an email that the publication