Do you pay tax on crypto in South Africa?Yes, SARS have confirmed that normal income tax rules apply to crypto assets. Taxpayers need to declare crypto assets’ gains or losses as part of their taxable income. Normal tax applies when you are actively trading crypto for a profit. Capital gains tax applies when you buy and hold crypto for a long-term investment. How much tax do I have to pay on crypto in South Africa?The amount of tax that you pay depends on your activity and your taxable income rate. For 2023, South African individuals will pay between 18% to 45% on crypto profits subject to Income Tax. In limited cases where Capital Gains Tax applies, South African individuals will be charged effectively up to 18% of their gains. How do I know whether to pay SARS Income Tax or Capital Gains Tax on my crypto?SARS views crypto transactions in one of two categories, capital or income and determine classification on a case by case basis. Traders are viewed as short-term investors and will be taxed on your entire crypto profits, at the normal income tax rates depending on their band. Crypto asset investors are generally seen as longer-term holders and will be taxed on 40% of any gain after annual R40 000 allowance. Different classifications may apply to different crypto transactions made by a taxpayer during the same tax year. How do I calculate my crypto gains in South Africa?Capital gain (or loss) is the difference between the cost basis of your cryptocurrency and the sale price. The gain should be calculated for each individual disposal made in the tax year, and added together. Although this sounds simple, it can be a mammoth task for users with high volumes of trading activity. There are also complexities like sourcing reliable, consistent valuations for assets and application of SARS rules to be considered. How does Recap help with crypto tax in South Africa?Recap calculates your crypto taxes automatically! Once you have imported all of your transactions, Recap finds the fair market value for your assets at the time of your trades, applies all SARS rules and calculates your income and capital gains taxes. How do I avoid crypto tax in South Africa?There are no legal ways to avoid paying tax on your crypto. Not reporting your crypto tax to SARS is considered tax evasion and can result in a penalty, even jail time. Not all crypto activity is taxable and there strategies that you can put in place to help to reduce your tax liability. Can SARS track crypto?Although traditionally crypto is based around anonymity, it’s important to remember that transactions are visible on the ledger meaning that activity is traceable and trails can lead back to an individual. KYC is also evolving, exchanges are now collecting more user data and regulation is growing so it’s possible that SARS can access enough of your crypto data to build up a picture. Do crypto exchanges report to SARS?We have no official word if exchanges report to SARS at the moment however as South Africa is a key OECD partner, they may have to in future because of the Crypto Asset Reporting Framework (CARF). It’s also important to note that crypto activity is public and available for SARS’ perusal via the blockchain. Are crypto to crypto trades taxable in South Africa?Yes. Crypto to crypto trades are classed as a taxable disposal where normal income tax or capital gains tax may apply depending on the type of gains and activity. How do I report my crypto tax in South Africa?Once you have calculated your crypto taxes they can be reported online via SARS e-filing through ITR12 form. Do I have to declare my crypto holdings to SARS?Yes. All cryptocurrency must be declared on your tax return, not just if you “cashed out”. This includes if you bought cryptocurrency, exchanged one cryptocurrency for another cryptocurrency, mined cryptocurrency and if you were paid in cryptocurrency. SARS has stated 'The onus is on taxpayers to declare all cryptocurrency-related taxable income in the tax year in which it is received or accrued. Failure to do so could result in interest and penalties'.