South African Crypto Investors and Service Providers Told of Legal and Tax Implications of Central Bank"s Plan
South African tax consultancy firm Tax Consulting SA, has said the recent announcement by the central bank — that will start to regulate cryptocurrency in 12 to 18 months — has legal and tax implications for both crypto investors and organizations providing intermediary services. The firm, however, says the South African Reserve Bank (SARB) “will not interfere in the investment decisions made by crypto investors.” Intermediaries Must Register as Financial Services Providers
According to a South African tax consultancy firm, Tax Consulting SA, recent revelations by the central bank deputy governor that his institution intends to regulate cryptocurrency in 12 to 18 months, means cryptos “will soon be regulated under the Financial Advisory and Intermediary Services (FAIS) Act.” This, therefore, means all organizations or individuals deemed to be providing intermediary or advisory services will be required to register as financial services providers with relevant bodies.
In a report shared with Bitcoin.com News, Tax Consulting SA predicts that as the next step, SARB will introduce know your customer (KYC) procedures and exchange control regulations. The consulting firm is, however, quick to point out that the South African Reserve Bank (SARB) “will not interfere in the investment decisions made by crypto investors.”
Instead, the central bank will issue the so-called “health warnings” and provide adequate protection to investors who are at risk of losing everything. While acknowledging that the SARB has not outlawed cross-border crypto trading and investment, the consulting firm insists that investors will still have to adhere to certain reporting standards. Tax Implications
The tax firm’s report in the meantime warned of possible tax implications that may arise which crypto investors must be aware of. The report states: Another concern will be in relation to tax compliance, for example, as tax evasion will be much more easily detectable with transactions falling under the purview of the SARB’s Financial Intelligence Centre (FIC).
Once the regulatory framework is in place, non-compliance will be easier to spot and at that point, South Africa’s “wild west” crypto industry will be a thing of the past, the report concludes. Tax Consulting SA also warns that during this period prior to the introduction of the regulatory regime, “crypto investors [need] to ensure that they are up to date with their compliance obligations.”
Register your email here to get a weekly update on African news sent to your inbox:
Tags in this story crypto regulatory framework, Crypto tax, Financial Advisory and Intermediary Services (FAIS) Act, KYC, South Africa crypto investors, South African Reserve Bank (SARB), Tax Consluting SA, tax evasion
What are your thoughts on this story? Let us know what you think in the comments section below. Terence Zimwara
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. Paraguayan Senate Approves Cryptocurrency Bill REGULATION | 1 hour ago Sri Lanka"s Central Bank Warns About Crypto Amid Severe Economic, Political Crisis REGULATION | 19 hours ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleOver Half of This Year’s Financial Pyramids in Russia Involved Crypto, Bank of Russia Finds Next articleYieldTopia the First Yield Protocol to Offer High APY Rewards That Are Backed by a Utility-Driven Ecosystem Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItOman to Incorporate Real Estate Tokenization in Virtual Assets Regulatory Framework
Real estate tokenization is set to be incorporated into Oman Capital Markets Authority (OCMA)"s virtual asset regulatory framework. According to an advisor with the authority, the tokenizing of real estate will open investment opportunities for local and foreign investors. Real ... read more.Bitcoin ATM Operator Indicted in New York Allegedly Running Illegal Business Attracting Criminals Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments Microbt Reveals Latest Bitcoin Mining Rigs — Machines Produce up to 126 TH/s With Custom 5nm Chip Design Terra"s Algorithmic Dollar-Pegged Crypto UST Is Now the Third-Largest Stablecoin