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SARS will soon receive more information about South Africans' overseas digital wallets and payment accounts, making it easier to detect undeclared income.
New regulations, which took effect on 1 March 2026, allow certain digital wallets and e-money accounts to be included in international tax information sharing.
In its October 2026 issue of Tax Practitioner Connect, SARS confirmed that it's preparing to receive additional information about digital wallets. The first international exchanges under the new rules are expected in 2027.
How the new digital wallet reporting rules work
Under the Common Reporting Standard (CRS), countries share information about financial accounts held by people who are tax residents elsewhere.
For example, if a South African tax resident holds money in a reportable overseas digital wallet, the wallet provider reports the account information to its local tax authority, which can then share it with SARS.
The new regulations expand this system to include certain types of electronic money. This includes money stored digitally in a regular currency, such as rands or dollars, that can be exchanged for the same amount of cash or bank money.
However, not every digital payment service is covered:
Services that simply transfer money without storing it are generally excluded, unless they hold the funds for more than 60 days.
E-money accounts are also excluded if their average balance, measured over rolling 90-day periods, never exceeds US$10,000 (about R165,000 in November 2026) during the reporting period.
South Africa isn't alone in making these changes. The European Union introduced the same expanded reporting requirements on 1 January 2026, with its first reports also due in 2027, according to Grant Thornton Ireland.
Freelancers and online sellers may be caught off guard
Nicolene Smit, education manager at CIBA, says the clients most exposed are those who don't think of a wallet as an account.
“In my view, freelancers, remote workers, online sellers, content creators, and people earning additional income through overseas platforms are most likely to be caught off guard. Some may regard their digital wallet as a payment app and may never have mentioned it to their tax practitioner,” she says.
These clients may leave income received through overseas platforms off their tax returns. Information obtained through international data sharing could then prompt SARS to investigate discrepancies.
Smit says a common misconception is that income only becomes taxable when it's transferred into a South African bank account. However, South African tax residents are taxed on their worldwide income, subject to exemptions and relief.
“Keeping earnings in a foreign wallet, or spending them directly from that wallet, does not remove the underlying tax obligation,” she says.
If SARS finds undeclared taxable income, the client could face additional tax, interest, and penalties.
Ask clients about digital wallets
Smit believes practitioners should ask clients directly about foreign wallets and payment platforms, as bank statements alone might not tell the full story.
She recommends checking clients' tax residency, the tax details they've given to payment platforms, and their transaction histories against their financial records.
“A wallet balance should not simply be treated as taxable income. The practitioner must establish what the transactions represent and when the underlying income was received or accrued,” she says.
This includes distinguishing taxable earnings from transfers between a client's own accounts, loans, gifts, and refunds.
If you're reviewing your client onboarding procedures, CIBA provides tax practitioner resources, including initial interview and document-review templates. You can explore these resources here.
What if a client hasn't declared wallet income?
If a client hasn't declared income received through a digital wallet, Smit recommends discussing the problem with them privately and calculating how much income went undeclared over the affected tax years.
Depending on the circumstances, the client could qualify for SARS's Voluntary Disclosure Programme (VDP), which allows taxpayers to disclose past tax defaults and potentially receive relief from certain penalties.
Have a look at our guide to cleaning up tax problems through the VDP, which explains how the programme works and who qualifies.
“The practitioner should avoid promising that disclosure will remove all penalties or interest. VDP relief is subject to statutory requirements, and interest relief is outside the programme’s relief provisions,” says Smit.
