South African tax authorities scrutinize cryptocurrency traders amid compliance uncertainty

South African cryptocurrency traders have started receiving notifications from the South African Revenue Service (SARS) indicating that their tax matters are under review. The tax authority is collecting information from various cryptoasset exchanges to assess compliance. Traders who fail to provide the requested information may face criminal charges under the Tax Administration Act. The SARS may also investigate historical cases of undeclared ownership of cryptocurrencies. The SARS has yet to provide clear guidance on whether cryptocurrency transactions are considered capital gains or income. As a result, it remains challenging to accurately record gains and losses on both local and foreign cryptocurrency exchanges.