Draft SARS Guide Confirms Crypto Assets Are Not Treated as Currency

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SARS has published a Draft Guide to the Taxation of Crypto Assets setting out how income tax and capital gains tax (CGT) apply to crypto assets in South Africa. The guide consolidates existing tax principles and clarifies how they apply to a growing range of crypto activities.

Crypto assets are treated as property, not currency

Crypto assets are treated as intangible assets, not currency. This means the foreign exchange rules under section 24I do not apply to crypto assets. Instead, normal income tax rules govern how gains and losses are treated.

Every time a crypto asset is used, exchanged, swapped, or paid away, a tax event generally occurs. This applies whether you sell crypto for rand, swap one crypto for another, pay for goods using crypto, or receive crypto as salary or a reward.

Revenue vs capital: still a facts-based test

The guide is clear that there is no automatic three-year rule for crypto assets. The section 9C rule applies only to equity shares, not to crypto. Whether a gain is taxable as income or as a capital gain depends on the taxpayer's intention and all surrounding facts. Factors like frequency of trading, how long assets were held, and the nature of the activity all matter.

Key activities covered

The guide addresses tax treatment for mining, staking, airdrops, hard forks, arbitrage, barter transactions, and crypto payments. It also covers how employers must handle crypto paid as salary or benefits, including the obligation to withhold employees' tax.

The Crypto-Asset Reporting Framework (CARF)

The guide notes that CARF regulations came into effect on 1 March 2026. From 2027, crypto asset service providers will be required to report transaction data to SARS, which will share it with other tax authorities internationally. South Africa is one of more than 40 countries committed to this framework.

Record-keeping and compliance

Taxpayers must keep records of all crypto transactions for at least five years. This includes purchase costs, disposal proceeds, market values at the time of transactions, and details of any wallets or platforms used. Good records are essential because the burden of proof rests on the taxpayer.

Key takeaways for taxpayers

The draft guide reinforces several important principles:

• Crypto is taxable under existing tax law.

• Every disposal of crypto can potentially trigger tax.

• Crypto is not treated as money or foreign currency for tax purposes.

• Each transaction must be analysed individually to determine whether it is on revenue or capital account.

• Swapping one crypto asset for another is a taxable event.

• Mining, staking, airdrops and crypto received for services all have specific tax consequences.

What this means in practice

The guide does not create new law. It applies existing income tax rules to crypto transactions and provides worked examples to show how those rules work in practice. Taxpayers who have been treating crypto gains as capital without proper supporting records should take note. SARS is clearly increasing its focus on this area, and the CARF regulations mean transaction data will soon flow automatically to SARS from service providers.

The draft guide is open for public comment. Comments can be submitted to policycomments@sars.gov.za.