South Africa’s Tax Agency Clamps Down on Crypto Holders

The South African Tax agency, SARS is reportedly sending taxpayers audit requests, asking crypto holders to disclose their trading activity.

February 5, 2021 | AtoZ Markets – The South African Internal Revenue Service (SARS) has sent out requests to taxpayers holding cryptocurrencies to disclose their trading activities and pay taxes.

South African Tax Agency Cracking Down on Non-Compliant Crypto Holders

According to the publication MyBroadband, the agency sent inquiries to a number of taxpayers, who in turn contacted Tax Consulting South Africa, which prepares tax reports.

The taxpayers who receive the letters must indicate the reasons for buying the cryptocurrency, as well as provide detailed information about any transactions on the trading platforms and bank statements. According to Tax Consulting South Africa, the IRS ‘actions mean the government is planning tough measures against tax-evading local cryptocurrency traders.

“It can be assumed that the IRS is in the process of identifying those responsible for tax evasion of citizens who did not disclose their profits or losses associated with trading cryptocurrencies,” the company said in a report.

As a reminder, the South African regulator proposed a bill under which crypto assets would be classified as financial products.

Read also: South African Government Warms Up For Regulating Cryto Assets

Recently, the  Financial Sector Supervisory Authority of South Africa (FSCA) said it will strengthen control of the cryptocurrency industry due to the closure of the fraudulent scheme Mirror Trading International, which managed to collect 23,000 BTC worth more than $700 million.

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