This is the third article discussing the basics of the SARS Draft Guide to the Taxation of Crypto Assets published in July 2026. All sections referred are from the Income Tax Act.
Donations tax
The term “donation” is defined in section 55(1) as “any gratuitous disposal of property, including any gratuitous waiver or renunciation of a right” and is expanded on in section 58(1) if property is, in the opinion of the Commissioner, disposed of for inadequate consideration. Subject to any exemptions, donations tax is levied on the value of any property disposed of under any donation by a resident donor. 100 Donations tax is levied at:
- a rate of 20% on the value of the property that is disposed of under a donation to the extent that the value of the property donated and the value of all property disposed of under a taxable donation on or after 1 March 2018 (excluding the current donation) does not exceed R30 million; and
- a rate of 25% to the extent such aggregate value exceeds R30 million.
The donor is liable for the payment of donations tax; however, if the donor fails to pay such donations tax within the prescribed period, the donee is jointly and severally liable for the tax. For example, casual gifts made by a donor other than a natural person are not subject to donations tax provided their values do not in aggregate exceed R10 000 during any year of assessment. In contrast, casual gifts made by a donor who is a natural person are not subject to donations tax provided their values do not in aggregate exceed R100 000 during any year of assessment. See section 56 for further detail.
The term “property” is defined as “any right in or to property movable or immovable, corporeal or incorporeal, wherever situated”. A crypto asset constitutes “property” and may be subject to donations tax if disposed of under a donation.
For example, if A gives B a crypto asset as a gift, donations tax must be considered since the gift is a gratuitous disposal of property by A to B. A must consider whether and to what extent any of the exemptions in section 56 are applicable, and in the event any donations tax is payable, A must pay the donations tax to the Commissioner by the end of the month following the month in which A gave B the gift.
Compliance and documentation
Taxpayers are required to comply with all the tax laws for each year of assessment.
Income tax return
The Commissioner annually issues a public notice in the Government Gazette of the persons that must furnish an income tax return. A return must be a full and true return and be signed by the taxpayer or by the taxpayer’s duly authorised representative. The person signing the return will be regarded as being cognisant of the statements made in the return. A full and complete tax return requires a taxpayer to, amongst others, appropriately disclose and take into account income, expenses, profits, losses, capital gains and capital losses arising from crypto asset transactions and in some cases the amount of crypto assets on the balance sheet. For a detailed consideration of the completion of the tax return, the external (operational) guides for companies, individuals, trusts, and deceased and insolvent estates are available on www.sars.gov.za.
Non-receipt of an income tax return by a taxpayer does not negate the obligation to submit one. A person who wilfully or negligently fails to submit a return or document to SARS is guilty of an offence and, on conviction, is subject to a fine or imprisonment for a period not exceeding two years.
Provisional tax
Provisional tax is not a separate tax from income tax. Instead, it is a method of paying income tax at least twice during the year of assessment, thereby preventing a taxpayer from having to pay a large lumpsum once a year on assessment. Depending on the circumstances, a taxpayer may make a third or “top-up” payment to avoid interest. Provisional tax payments are based on an estimate of taxable income for the year of assessment. This estimated taxable income calculation must, amongst other considerations, appropriately take into account crypto asset transactions that occur during the year. On assessment, provisional payments are off-set against the liability for normal tax for the applicable year of assessment. If there is a shortfall, the taxpayer will need to make an additional payment. Conversely, if there is an excess, a refund will be due to the taxpayer. It is important for taxpayers to determine if they are provisional taxpayers so that, if they are, they can comply with their statutory obligations by submitting the required provisional tax returns and making the necessary provisional payments on time.
Record-keeping
A taxpayer must maintain records, books of account, or documents relating to any crypto asset transactions. Retaining such records will assist the taxpayer in fulfilling the requirements of a tax act and in satisfying SARS that the taxpayer has complied with the applicable legislative requirements. These records will also assist the taxpayer in discharging his or her burden of proof, for example, to demonstrate that an amount for which the taxpayer is claiming a deduction in respect of the purchase of a crypto asset meets the requirements for deduction under a relevant section in the Act, or that the market value they are using as proceeds for a crypto asset traded for another crypto asset is appropriate.
The necessary records must be kept for at least five years from the date of the submission of the return. The requirement to keep records, books of account or documents for a tax period also applies to a person who is not required to submit a return but has, during the tax period, received income, incurred a capital gain or capital loss, or engaged in any activity that is subject to tax (or would be subject to tax, but for the application of a tax threshold or exemption). In this specific case, the necessary records must then be kept for five years from the end of the relevant period. However, records, books of account, or documents that are relevant to an audit or investigation that a taxpayer has been notified of or is aware of, or are relevant to an objection or appeal that has been lodged, must be retained until the audit or investigation is concluded, or the assessment or decision becomes final, or the applicable five-year period has elapsed, whichever is the later.
A return includes any form, declaration, document or other manner of submitting information to SARS that incorporates a self-assessment or forms the basis on which an assessment is to be made by SARS.
Disclosure of information
General
SARS is empowered, under the TA Act, with a wide range of data and information-collecting powers, including:
• income tax returns;
• third-party data returns;
• inspection, verification, audit, and criminal investigation;
• request for relevant information from the taxpayer and other persons; and
• conducting enquiries.
Crypto-Asset Reporting Framework
On 10 November 2023, a joint statement titled “Collective engagement to implement the Crypto-Asset Reporting Framework” was issued by South Africa and several other countries. The countries welcomed the new international standard on automatic exchange of information between tax authorities developed by the Organisation for Economic Cooperation and Development (OECD) – the Crypto-Asset Reporting Framework (CARF).
Countries to the Joint Statement: Armenia, Australia, Austria, Barbados, Belgium, Belize, Brazil, Bulgaria, Canada, Chile, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, the Netherlands, Norway, Portugal, Romania, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, the United Kingdom, and the United States of America; the Crown Dependencies of Guernsey, Jersey, and the Isle of Man; and the United Kingdom’s Overseas Territories of the Cayman Islands and Gibraltar.
The CARF aims to enhance the ability of tax authorities to ensure tax compliance and clamp down on tax evasion, which reduces public revenues and increases the burden on compliant taxpayers. The countries to the Joint Statement expressed an intention to work towards transposing the CARF into domestic law and activating exchange agreements in time for exchanges to commence by 2027, subject to national legislative procedures where applicable.
Regulations in relation to the CARF were gazetted on 28 November 2025 (www.sars.gov.za/legal-counsel/secondary-legislation/regulations/). The date of implementation is 01 March 2026. Very broadly, Reporting Crypto-Asset Service Providers (RCASP) are required to collect and report detailed data on transactions involving crypto assets to their relevant tax authority, which will then exchange this data with other tax authorities.
An RCSAP is “any individual or entity that, as a business, provides a service effectuating exchange transactions for or on behalf of customers, including acting as a counterparty or as an intermediary to such exchange transactions, or by making available a trading platform.”
A consideration of the CARF and the regulations is outside of the scope of this guide. They are mentioned for completeness to create an awareness of their existence so that those potentially impacted can seek additional information. Taxpayers wishing to obtain more information about the CARF may consult the SARS FAQs on Crypto-Asset Reporting Framework Regulations.