Joint Press Release: Monday, May 31 2021, 12:30 CAT | Source: Luno, VALR, Altcointrader
The South African Revenue Service (SARS) is conducting a tax risk assessment exercise in respect of South African residents engaged in the mining, speculation and/or investment in crypto assets. On 6 April 2018, SARS released a statement to the media entitled “SARS stance on the tax treatment of cryptocurrencies”. In this statement SARS reminded taxpayers to declare all cryptocurrency related taxable income during the year such income was received or accrued.
In order to assess the tax risks associated with the above activities, SARS has made contact with South African cryptocurrency exchanges to request 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 cryptoassets.
AltCoinTrader, Luno, and VALR are three cryptocurrency exchanges that have confirmed that they have received requests for transactional information in relation to a small number of customers.
“VALR takes the privacy and protection of our customer data very seriously,” says Farzam Ehsani, Co-founder and CEO of VALR.com. ‘VALR is 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.”
“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 regulators,” says Richard de Sousa, CEO of AltCoin Trader. “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. AltCoinTrader, Luno and VALR all provide the ability for customers to download their transaction history to prepare any tax declarations that are required.