According to a report by MoneyWeb, The South African Revenue Service (SARS) has opened dialogue with a number of the top technology companies in the world in order to try and enable the tax revenue service to track cryptocurrecy trades more efficiently. It is unclear whether this move to track the trading of these cryptocurrencies is in order to try and formulate regulation around it in the future.
The interest around these cryptocurrencies, with Bitcoin being the most famous, has captured headlines worldwide as the price continues to rise. These currencies, however, operate in an environment which is anonymous, regulators around the world are still struggling to formulate a plan to deal with it. The rise of these currencies poses new threats to financial institutions such as SARS.
In the MoneyWeb report, Dr Randall Carolissen, SARS group executive for research, revealed that SARS is having discussions with its counterparts on how to track cryptocurrency trades.
“As you can imagine it is very difficult – the blockchain technology. Without revealing too much – we are talking to some of the top technology companies in the world that [are] doing similar work for Canada and the UK and we are hoping to get that technology.”
“At the moment, we are treating cryptocurrency in the same way as capital realisation – so in other words, it is like a Krugerrand. If you buy it at a particular point and you then sell it, you will be faced with a capital appreciation and then we will treat it as Capital Gains Tax.”
Carolissen says SARS is working through the Organisation for Economic Cooperation and Development’s (OECD) recommendations, which include quite detailed information on how cryptocurrencies should be treated.
He, however, concluded by revealing that SARS has come to no conclusion on the matter just yet.