SARS Draft Guide Sets Out Clear Guidelines for Crypto Asset Taxation

South Africa's tax authority, SARS, has released a Draft Guide to the Taxation of Crypto Assets, putting pressure on crypto asset owners to declare their transactions and previously undeclared earnings.

Nico Theron, founder of Unicus Tax Specialists, says the guide sets aside common misconceptions about the taxation of crypto assets, including the idea that crypto transactions only trigger a tax liability when converted into fiat currency.

The guide provides specific examples of how transactions, through arbitrage, staking, bartering, or mining, will be taxed. Theron believes the guidance is 'fairly clear' and that it sets out to provide foundational principles rather than overly specific rules.

The draft guide also notes that taxpayers conducting crypto asset mining activities may be entitled to deductions for wear-and-tear allowances on computers used in the process, as well as for electricity used and salaries paid to staff.