The South African Revenue Service (SARS) has officially shifted gears in its approach to taxing crypto trading income.

By Nicole Erlank, manager, and Tertius Troost, senior manager at Forvis Mazars in South Africa

The SARS Crypto Asset Unit, established to monitor and enforce tax compliance in the digital asset space, has begun issuing assessments and audit notices to individuals, many of whom are only now realising that their crypto trading gains are taxable.

If you’ve been trading crypto, whether casually or more actively, it’s worth understanding how SARS views these transactions and what your responsibilities are.

Crypto trading income has always fallen within the scope of South Africa’s tax net. Section 1 of the Income Tax Act defines “gross income” broadly to include all receipts and accruals received by or accrued to a taxpayer, whether in cash or in kind. This includes income derived from crypto trading, even if this involves pure crypto to crypto transactions. Many taxpayers were, mistakenly, of the view that gains would only be subject to tax once it is converted to fiat currency or brought into a South African bank account.

Despite this, many taxpayers still misunderstand their obligations. SARS has made it clear that crypto trading income is not exempt from tax. Whether you are swapping tokens between wallets, trading altcoins on local platforms, or managing stablecoin positions across international exchanges, your profits are still likely to fall within the scope of taxable income under the Income Tax Act.

SARS has also consistently maintained that crypto-related income is generally revenue in nature. This means that profits from trading, mining, staking, or even airdrops are typically subject to income tax—not capital gains tax. While it is theoretically possible to argue that a crypto trading gains are capital in nature (such as in the case of long-term holding with no trading activity), this is a difficult position to sustain in practice due to the volatility of crypto markets and the transactional behaviour of most users. Frequent trades, short holding periods, and use of multiple exchanges are all strong indicators of revenue-generating activity.

SARS has started issuing additional assessments based on banking notifications and third-party data. This suggests that SARS is using external sources to identify crypto trading activity and guide their audit processes. It is a sign that crypto transactions no longer fly under the radar (not that it should ever have been presumed that it was under the radar in the first place).

That being said, this does not mean taxpayers are being targeted unfairly. Rather, it reflects a broader move toward transparency and consistency in how all income, crypto income included, is treated. This coupled with the additional funding made available to SARS by National Treasury to improve tax compliance results in taxpayers needing to ensure their tax affairs are in order.

If you’ve traded crypto in the past and haven’t declared the income, the Voluntary Disclosure Programme (VDP) remains a helpful route to regularise your tax affairs. SARS has shown flexibility in accepting crypto tax software outputs to calculate gains and losses across wallets and exchanges, something that can otherwise be complex to do manually.

Whether you are a casual investor or a more active trader, it is worth reviewing your crypto activity and ensuring it is reflected accurately in your tax return.

Crypto trading is an exciting and fast-moving space, but it is important to stay aligned with your tax obligations. If you are unsure about how your crypto activity should be treated, or if you need help navigating the VDP process, speak to your tax advisor who understands both the technical and regulatory sides of crypto trading.