The South African Revenue Service (SARS) has reportedly asked three crypto exchanges in South Africa to submit customer information for a selection of customers.
According to a local daily, SARS has sought information as part of a tax risk assessment of residents involved in mining, speculation and / or investing in crypto assets, citing Section 46 of the Tax Administration Act of South Africa.
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The 3 exchanges that have been addressed and asked for customer information so far include:
The above 3 exchanges have released a joint statement that states:
“SARS has confirmed that the main purpose of collecting this information is risk analysis, which will reveal the need for future action in relation to crypto assets.
The conclusion of our legal advice is that, according to Section 46 of the Tax Administration Act, we, together with other cryptocurrency exchanges, are obliged to provide the information requested by SARS. “
The 3 exchanges have confirmed that they only pass on the customer data required by law and that they are no longer ready and obliged, and have “taken legal advice on their obligation to limit their scope as much as possible”.
The above request comes just months after it was reported that SARS was sending audit requests for disclosure of cryptocurrency trading activities.
According to the report, the tax audit request asks for the following information:
- The purpose that taxpayers bought cryptocurrency for
- A letter from the trading platform (s) confirming the investments and relevant trading plans for the period and bank statements
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