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South African Revenue Service (SARS) directs 3 crypto exchange to submit client information

The South African Revenue Service (SARS) has reportedly asked three crypto exchanges in South Africa to submit client information for a selection of customers.

According to one of the country’s dailys, the revenue service rquested for the information as part of a tax risk assessment exercise on residents involved in mining, speculation, and investment in crypto assets.

SARS quoted Section 46 of the Tax Administration Act of South Africagives the South African Revenue Service (SARS) the power, for purposes of the administration of a tax Act in relation to a taxpayer, to request a taxpayer or another person, within a reasonable period, to submit relevant material whether orally or in written form.

Meanwhile The 3 exchanges that have so far been approached and requested for client information include: AltCoinTrader, Luno, VALR and these three 3 exchanges have released a joint statement saying “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 then concluded that their legal advice is that per section 46 of the Tax Administration Act, along with other cryptocurrency exchanges, are obliged to provide the information requested by SARS.”

The 3 exchanges have therefore confirmed that they would only share customer data that is requred by law and nothing more and have ‘however taken a legal advice on their obligation to comply and ensure its scope is limited to the greatest extend possible.’

Report says the request is coming just a few months after it was reported that SARS is sending out audit requests for cryptocurrency trading activity disclosures adding that the tax audit request seeks to know the purpose for which the taxpayers purchased cryptocurrency

However, the local media says, Stratum, a bundled crypto investment company that allows users to earn interest on their crypto holdings via its advanced wallet, operates in South Africa and has said it will not comply with the directive by SARS.

 

 

 

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