South Africa’s three largest cryptocurrency exchanges – AltCoinTrader, Luno and VALR – say they have been approached by the South African Revenue Service as part of a tax risk assessment exercise on residents involved in “the mining, speculation and/or investment in crypto assets”.
In 2018, Sars released a media statement entitled “Sars stance on the tax treatment of cryptocurrencies” in which it reminded taxpayers to declare all cryptocurrency-related taxable income during the year such income was received or accrued.
In a joint statement released on Monday, the three largest crypto exchanges in the country say they have been approached by Sars for information on a “selection of customers in terms of section 46 of the Tax Administration Act″.
“Sars has confirmed that the primary purpose of collecting this information is for risk analysis, which will inform the need for future action with respect to crypto assets,” they add.
“VALR takes the privacy and protection of our customer data very seriously,” says Farzam Ehsani, co-founder and CEO of VALR.com. “We are also committed to being compliant with the laws and regulations that govern our business. We have engaged with Sars to express our concern for the privacy of the data of our customers and we have also sought legal advice on our obligation to comply with Sars’s request.”
‘Obliged by law’
“The conclusion of our legal advice is that per section 46 of the Tax Administration Act, along with other cryptocurrency exchanges, we are obliged to provide the information requested by Sars.”
Adds Marius Reitz, GM for Africa at Luno: “Luno does not share customer information with Sars on a routine or ongoing basis. More generally, and as described in Luno’s privacy policy, we will only share customer data with law enforcement and other regulatory authorities when we are required by law to do so.
“Luno has carefully reviewed the Sars request, taken legal advice on our obligation to comply with it, and worked with Sars to ensure that its scope is limited to the greatest extent possible. We are, however, required by law to comply with the request.”
Says Richard de Sousa, CEO of AltCoinTrader: “AltCoinTrader has always strived to protect our customers’ privacy and provide the necessary tools to enable compliance. In order for the industry as a whole to experience growth, exchanges and industry players are obliged to cooperate with regulator. AltCoinTrader has taken legal counsel to ensure that all information requested by regulators is within our legal obligation.”
Cryptocurrency platforms are not yet required to provide customers with tax certificates. In their joint statement issued on Monday, AltCoinTrader, Luno and VALR say they all provide the ability for customers to download their transaction history to prepare any tax declarations that are required.
- This article was originally published on Moneyweb and is used here with permision