Which Types of Taxes Apply?
Any person who makes a transaction (buy, sell or swap) in crypto assets, mines or stakes crypto assets, or otherwise participates in decentralised finance, must declare their activities to SARS in their returns.
Either income tax or capital gains tax will apply to crypto asset activities, depending on the type of gains and the activity undertaken to generate them. Any gains from short-term and active transactions are generally subject to income tax, whereas long-term and passive gains (i.e., investment returns) are generally treated as capital gains.
There is no single factor that distinguishes between when gains and losses should be subject to the income tax or capital gains tax rules, with SARS taking a very much case-by-case approach. This is a complex area, and we recommend that you consult with a professional advisor who is familiar with crypto assets to consider your particular circumstances.