South Africa activated the Crypto-Asset Reporting Framework (CARF), developed by the OECD, incorporating crypto holdings and foreign accounts into the global tax transparency system.
The South African Revenue Service (SARS) confirmed it will begin using this framework to track tax compliance on digital assets, through the automatic exchange of financial data between the countries incorporated in the framework.
Under the new scheme, exchanges and financial institutions will be required to report their users’ cross-border holdings and transactions to tax authorities. This mechanism aims to reduce anonymity in international operations and make it harder to evade taxes by concealing crypto assets in foreign jurisdictions.
On the tax side, the framework currently in force in South Africa already contemplates Capital Gains Tax (CGT) on crypto returns. The system includes 40% of capital gains in each taxpayer’s taxable income, which can result in an effective rate of up to 18% depending on the income bracket.
Source: https://x.com/ParliamentofRSA/status/2028411154377121896
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