SARS is Cracking Down On Crypto – Here's How it Affects Your Business

If your business is involved in cryptocurrency, the South African Revenue Service (SARS) has you in their sights.

Recently, SARS has started sending out notices to crypto traders, telling them that their tax affairs are being reviewed. This isn’t something to take lightly, especially if your business has any involvement with crypto.

But don’t worry—we’re here to break it down for you, step by step, so you can understand what’s going on and what exactly you need to do.

“Why is SARS Focused on Crypto?”

As cryptocurrency trading becomes more popular, SARS wants to ensure that businesses are paying the correct amount of tax on any profits they make from crypto.

SARS is gathering information from cryptocurrency exchanges, so they already know who is trading and how much money is involved. If your business has made any profits from crypto, SARS expects you to report those profits on your tax returns.

This is important because SARS isn’t just curious—they’re actively checking and enforcing the rules. If you fail to report your crypto earnings, you could face penalties, fines, or even criminal charges.

So, if your business deals with crypto, now is the time to get your tax affairs in order.

“How Does This Impact My Business?”

If your business owns cryptocurrency, trades it, or uses it in any way, you need to treat it like any other business transaction. This means any profit you make from crypto is taxable.

If SARS finds that you didn’t report your crypto earnings or underreported them, your business could face a bunch of consequences:

• You might have to pay back taxes plus extra penalties.
• In serious cases, hiding income or lying on your tax returns could lead to criminal charges.
  

And it’s not just SARS that’s paying attention—the South African Reserve Bank (SARB) also has strict rules about moving money in and out of the country for crypto trading.

This means you need to be careful if your business is using foreign exchanges or transferring money abroad for crypto purposes.

“What Should I Do Now?”

First, gather all the records of your crypto transactions.

This includes every time you bought, sold, or traded cryptocurrency, even if you were just swapping one type of cryptocurrency for another (for example, Bitcoin for Ethereum).

You need these records to accurately report your earnings to SARS.

Report ALL Your Crypto Profits

Many people think they only need to report their crypto profits when they convert them to Rands, but that’s not true. Every time you sell or trade crypto, it’s a taxable event.

This means if you sold Bitcoin for Rands or traded Bitcoin for Ethereum, you need to report that profit to SARS.

Don’t wait for SARS to catch you.

If you haven’t reported your crypto profits in the past, now is the time to fix that.

SARS is using advanced technology, like artificial intelligence, to track crypto activities. They can easily find out if your business has been trading crypto without reporting it, so it’s better to declare everything now before it becomes a bigger problem.

“How is Crypto Taxed for Businesses?”

Crypto is taxed differently depending on how you use it. Here’s a quick breakdown of the two main ways your business’s crypto activities could be taxed:

Capital Gains Tax

If your business holds onto cryptocurrency as an investment (for example, buying Bitcoin and holding it for a few years), then sells it at a profit, the profit is considered a capital gain.

The good news is that only part of the gain is taxed—80% for companies.

Income Tax

If your business is actively trading crypto—meaning you’re regularly buying and selling, trying to make short-term profits—then SARS considers this part of your regular business activities.

The profits from these trades will be taxed as ordinary income, at the company tax rate of 27%.

This means that crypto profits are treated just like any other income your business generates, and must be reported as part of your annual income tax filings.

“What’s the Next Step?”

Moving forward, make sure to declare all your crypto-related transactions in your tax returns.

This includes sales, trades, and even using crypto to buy goods or services. Don’t assume that only big transactions matter—every taxable event must be reported to SARS.

If your business deals with foreign crypto exchanges or makes cross-border transfers to buy crypto, you need to stay within the R1 million discretionary allowance or the R10 million foreign investment allowance.

This ensures that you’re complying with the South African Reserve Bank’s (SARB) exchange control regulations. Breaking these rules could lead to additional fines or penalties.

“What Happens if I Don’t Comply?”

Failing to report your crypto profits could lead to serious consequences, including:

Fines and Back Taxes

SARS will demand that you pay back the taxes you owe, plus interest and penalties. These costs can add up quickly and hurt your business’s cash flow.

Criminal Charges

In extreme cases, SARS can pursue criminal charges if they believe you’ve deliberately tried to evade taxes. This could harm your business’s reputation and even lead to legal action.

SARB Penalties

If you’ve been using foreign crypto exchanges or transferring money overseas to trade crypto without following SARB’s rules, you could face additional penalties related to exchange control violations.

The era of "flying under the radar" with crypto trading is over.

SARS is taking cryptocurrency seriously, and business owners need to make sure they’re fully compliant with all tax and exchange control laws.