Please note: Our office will be closed between 23 Dec and 6 Jan. We wish you and your loved ones safe travels, a blessed Christmas and a happy 2022!
If you own crypto, the mini budget speech included something you should know about. In the Medium-Term Budget Policy Statement on 21 October, Finance Minister Enoch Godongwana said the government wants to stop approving cross-border crypto transfers in advance. “Instead, we must assess transactions for legitimacy and tax compliance,” he said.
So before you move crypto offshore, you might want to consider your tax record. If your gains have never appeared on a tax return, now is a good time to sort out your crypto tax.
In April, National Treasury and the Reserve Bank published draft capital flow management regulations to replace the exchange control rules in place since 1961. They include rules for crypto assets moving across borders. Under the draft, individuals would send crypto abroad through an authorised crypto platform, using their annual offshore allowances.
The minister said the draft drew thousands of comments and that a different approach is needed, with a revised second draft to come for comment. The details will change before the rules are final, but he was clear about what Treasury will look at: whether the transaction is legitimate and whether the person behind it is tax compliant.
SARS doesn’t treat crypto as money. It’s an asset, and normal tax rules apply when you sell or trade it. How you’re taxed entirely depends on why you hold it.
If you trade often to make a profit, your gains count as income and are taxed at your marginal rate, up to 45%. But if you bought some crypto as a long-term investment, capital gains tax applies instead. The most an individual pays is an effective 18%, and the first R50 000 of net capital gains each tax year isn’t taxed.
Swapping one coin for another counts as a sale. If you swapped Bitcoin for Ethereum last year, SARS treats that as disposing of the Bitcoin, even though no rands changed hands. Paying for something with crypto works the same way. You also can’t average your purchase prices to work out a gain. SARS’s draft guide on crypto says you must use either the actual cost of the coins sold or a first-in, first-out method.
Since 1 March 2026, South Africa has applied the Crypto-Asset Reporting Framework, an international standard that requires crypto platforms to report their users’ transactions to SARS. That information can also be shared with tax authorities in other countries.
It doesn’t change what you have to do yourself. SARS says individuals must still declare crypto transactions on their income tax returns, and failing to do so can unfortunately lead to interest and penalties.
Start by downloading your full transaction history from every platform and wallet you’ve used, including accounts you’ve since closed. For each trade, you need the date, the rand value and what you received.
If you should have declared gains in earlier years, SARS’s Voluntary Disclosure Programme lets you correct them and can bring relief from understatement penalties. However, you’ll still pay the tax and interest. You can only use it before SARS opens an audit or investigation into the same matter, so it pays to move first.
If your crypto is owned by a trust or a company, the same principles apply, but the tax is calculated differently. A trust that keeps its gains, for example, pays a higher effective rate than an individual would.
Our team at Huysamen Westraad helps individuals, trusts, and businesses work out their crypto tax, rebuild their records, and, where needed, prepare a voluntary disclosure. If you’re not sure where you stand with your crypto, get in touch before the revised regulations are published.
.avif)
