The South African Revenue Service (SARS) says it will soon provide clarity on the tax implications of transacting in cryptocurrencies like Bitcoin in either an interpretation or practice note.
In an interview with ITweb, SARS spokesperson Sandile Mamela said the revenue service, like most other international revenue authorities, is looking at the implications of virtual currency on its tax base.
“We are currently having exploratory discussions with other jurisdictions and will continue to explore options in the coming year,” continued Mamela.
The spokesperson says SARS is treating crypto-currencies under Capital Gains Tax (CGT), however it is an area the revenue service will continue to explore.
It was In July last year that the South African Reserve Bank (SARB) said it would start testing a number of regulations related to Bitcoin and other cryptocurrencies before the end of 2017.
This was followed by a December report in which SARS said it was in discussions with a number of technology companies to enable it to track the trade of cryptocurrencies more efficiently.
In December, the SARS group executive Dr Randall Carolissen said “As you can imagine it is very difficult – the blockchain technology. Without revealing too much – we are talking to some of the top technology companies in the world that are doing similar work for Canada and the UK and we are hoping to get that technology,”.
Carolissen said SARS is working through the Organisation for Economic Cooperation and Development’s (OECD) recommendations, which include quite detailed information on how cryptocurrencies should be treated.
He also added that SARS had not yet received any major cryptocurrency declaration.