South African Crypto Investors and Service Providers Told of Legal and Tax Implications of Central Bank’s Plan – The central bank deputy governor’s recent revelation that his institution plans to regulate cryptocurrencies in 12 to 18 months, according to Tax Consulting SA, means that they “will soon be regulated under the Financial Advisory and Intermediary Services Act.”
This means that all people or organizations who are thought to be offering intermediary or advisory services will need to register as financial services providers with the appropriate authority.
Tax Consulting SA predicts that SARB will impose know your customer procedures and exchange control regulations as the next step in a report shared. However, the consulting firm is quick to note that the South African Reserve Bank would not interfere in the investment decisions made by crypto investors.
Instead, the central bank will issue the alleged “health warnings” and give investors who face total loss ample protection. The consulting firm insists that investors will still be required to abide by specific reporting rules even though it acknowledges that the SARB has not outlawed international crypto trade and investing.
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In the meantime, the tax firm’s study issued a warning about potential tax implications that cryptocurrency investors should be aware of. The finding shows:
“Another issue will be in regards to tax compliance, for instance, as tax evasion will be much easier to see with transactions coming under the Financial Intelligence Center of the SARB’s purview.”
The report concludes that once the regulatory framework is in place, non-compliance will be simpler to notice and the “wild west” nature of South Africa’s crypto industry will be history. In addition, Tax Consulting SA cautions that “crypto investors need to ensure that they are current with their compliance requirements during this period prior to the introduction of the regulatory system.”