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Sars turns on the heat, asks crypto exchanges for certain customers’ information

AltCoinTrader, Luno, and VALR say they have been approached by Sars for information on a small number of customers.
Image: AdobeStock

SA’s three largest crypto exchanges – AltCoinTrader, Luno, and VALR – say they have been approached by the SA Revenue Service (Sars) as part of a tax risk assessment exercise on SA residents involved in “the mining, speculation and/or investment in crypto assets”.

In 2018 Sars released a media statement entitled ‘Sars stance on the tax treatment of cryptocurrencies’ in which it remined taxpayers to declare all cryptocurrency-related taxable income during the year such income was received or accrued.

In a joint statement released on Monday, the three largest crypto exchanges in the country say they have been approached by Sars for information on a “selection of customers in terms of Section 46 of the Tax Administration Act, 2011″.

“Sars has confirmed that the primary purpose of collecting this information is for risk analysis, which will inform the need for future action with respect to crypto assets,” they add.

‘Obliged to comply’

“VALR takes the privacy and protection of our customer data very seriously,” says Farzam Ehsani, co-founder and CEO of VALR.com.

“We are also committed to being compliant with the laws and regulations that govern our business. We have engaged with Sars to express our concern for the privacy of the data of our customers and we have also sought legal advice on our obligation to comply with Sars’s request.

“The conclusion of our legal advice is that per Section 46 of the Tax Administration Act, along with other cryptocurrency exchanges, we are obliged to provide the information requested by Sars.”

Working with Sars to limit the scope

Adds Marius Reitz, general manager for Africa at Luno: “Luno does not share customer information with Sars on a routine or ongoing basis. More generally, and as described in Luno’s privacy policy, we will only share customer data with law enforcement and other regulatory authorities when we are required by law to do so.

“Luno has carefully reviewed the Sars request, taken legal advice on our obligation to comply with it, and worked with Sars to ensure that its scope is limited to the greatest extent possible.

“We are, however, required by law to comply with the request, which is made under Section 46 of the Tax Administration Act.”

Says Richard de Sousa, CEO of AltCoinTrader: “AltCoinTrader has always strived to protect our customers’ privacy and provide the necessary tools to enable compliance.

“In order for the industry as a whole to experience growth, exchanges and industry players are obliged to cooperate with regulator.

“AltCoinTrader has taken legal counsel to ensure that all information requested by regulators is within our legal obligation.”

Cryptocurrency platforms are not yet required to provide customers with tax certificates. In their joint statement issued on Monday, AltCoinTrader, Luno and VALR say they all provide the ability for customers to download their transaction history to prepare any tax declarations that are required.

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Bang goes their sole reason for existence !!
Good bye Luna, Altcoin and VALR

Decentralised exchanges like Bisq about to become way more popular in SA…

Please be warned that the US authorities are looking at how to something similar to what China did two weeks ago for Crypto.

Yes, governments were never just going to sit by and watch their tax revenue disappear into blockchain based “currencies”. Now the value of crypto is exactly zero, worse than a tulip bulb.

Good start…now SARS must start targeting all the AirBnB “entrepreneurs” who go around boasting what a “killing” they are making tax-free…

AirBnB would gladly co-operate with SARS, sharing details of their SA accommodation partners.

It’s not like these “entrepreneurs” can hide their online presence, it’s all out in the open for anyone who cares to check.

SARS visa vie ANC trying desperately to find all the holes to plug

The Elite have expensive taste and their cost of living needs our tax to subsidise this

We pay, they steal and we keep paying so they can steal some more..The minute people start revolting by avoiding paying tax, they pounce.. If only they can Govern as well as they collect, SA would be a Utopian country

What a dysfunctional sick Government

Sars needs to ask for customers’ information from Guernsey, Jersey, Mauritius, Cayman Islands etc.

Does Investec’s Unit Trust system for Guernsey still have that on/off switch called ‘Bed and Breakfast’ “that allows investors to park monies during tax declaration periods?

That’s an interesting concept…I had no idea a policy like this existed! How much is the bed and breakfast rate? I doubt Investec would provide this free of charge. Perhaps the bed is free but breakfast you pay for – there’s no such thing as a free meal…or is that just lunch?

Not sure if it still exists but it did, under the name Silica.

Wonder what happens now to all those “penny millionairers” from the North who made and lost bundles of loot without telling the missus ?

Like the correction in Crypto currently underway SARS action is definitely not unexpected.

So most using SA exchanges would have declared or will do so in future.

The crooks will do what they do when they use the banking system and fiat currency anyway and with this action long expected their tracks are covered.

The risk is anything the anc touch (regulate) stops working and are destroyed. So chances are crypto like most other investments will become an offshore exercise. So in a few years good old SA will benefit NOTHING.

It is also to be expected when you have a government that attach a parasite or multiple parasites to every industry that is does not stick around until death.

Surely if it’s taxed money being used to buy Crypto, it’s already been disclosed so why would one worry about declaring it to SARS?

Depending on how long you held the crypto and how frequently you traded in it you would either have to declare for capital gains tax or in the worst case scenario include the profit as taxable income. If you bought crypto and held then you will still be liable for capital gains tax when you sell.

from a tax point it would just be fair if more is asked by sars to the guptas about their affairs – they must have several clear cut profits from government backhand deals – but currently they sit high and dry in dubai and laugh in for the sa government

Don’t worry about the Guptas . They got bigger problems than SARS ….the FBI have got that family in their sights ! I would prefer to deal with SARS than the FBI !

Great Point. SARS is mum about the great GUPTA theft…. that left a country broken…. and BILLIONS unaccounted.

And all Kieswetter can do is go after the Crypto investors….

SARS and Kieswetter have the wrong priorities….

The party is over ! The police have just arrived and told us to turn the music off …….and to turn on the lights ! Those still on the dance floor lose …..

question to sars: what are you doing when it comes to the taxi income / profits and sars gets hardly any direct tax out of this industry????????????

Speculative answer from SARS (which is the same answer applicable to all attempts to regulate that industry): “Nothing, because we don’t want to die in a hail of gunfire.”

Not to worry folks, decentralized exchanges have arrived, no more KYC,9% yield on BTC. Centralized Exchanges were always going to hand you over to the authorities. We have rights to financial privacy, open trade and sound money. Time to say goodbye to the legacy banking scam and become your own bank.

Agreed. Don’t forget some physical gold as insurance. Analogue wealth for a digital age

Lol. I called it when everyone was heralding crypto as ‘immune to tax’, as well as all those that thought SARS can just ‘access your bank account’. Its far more simple to just match what you report against legit financial institutions…. Or you can take a chance with these crypto pyramid schemes 😀

SARS is really making a LOT of noise these days funding the criminal clique called the ANC. But conveniently, the taxi and illicit cigarette industry is ignored, as are the Eskom gangsters, the fringe benefits tax to the former number 1 and his many accomplices as well as the wholesale looting of SOEs

If taxpayers had suitable anatomy NO taxes should be paid until the real thugs are wiped out financially -NOTHING!

One should, as part of a risk assessment of a strategy/tactic, always ask three questions:
– If I rely on non-detection as a risk mitigant, what is the likelihood that the mitigant fails and the strategy/tactic is discovered?
– What if, having been discovered, the strategy/tactic is able to be unpacked and understood?
– What are the consequences if the strategy/tactic is discovered, unpacked and understood.’

How much stronger morally SARS would be if they would ensure that the money they squeeze out of the productive sector of society would be defended against the political fraudsters, thieves and wasters. Until they can plug these glaring holes they will have to deal with ever increasing resistance.

The problem with any investment scheme that says they are not answerable to the the authorities is that they probably not answerable to the investor either ………

Out there on your crypto bubble nothing can touch you.

As a crypto investor in one of the listed exchanges, this news does not concern me at all. My investment grew by close to 1000% over the past year. Shaving off a small amount for capital gains tax is a drop in the ocean and will certainly not even let me actively search for other exchanges.

… At a capital growth of around 1000 percent – a small bit to shave off for sars is gonna be Alot closer to 50 % of yr takings …………..

Not if not touched for more than a year….

Unless these exchanges can provide a tax certificate how is one expected to quantify every single trade that has taken place and input your gains/losses correctly?

SARS seem to have more power on general individuals than on state capturers.

SARS has to get creative to feed this insatiable ineffective Government that just talks of cutting expenditure but never does.

End of comments.

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