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South African investors are required to payan 18% capital gains tax on any gains incurred through crypto transactions andregular income tax rates apply to income-bearing crypto transactions.
But, here’s the caveat, there are no clear guidelines concerning the demarcations between income and CGT transactions leaving crypto investors in a stir.
Moreover, the authorities are yet to release specific guidelines on the taximplications of more complex transactions such as Airdrops, Forks, and DeFi.
That’s why we created this comprehensiveguide to help investors navigate the crypto tax landscape conveniently andguide them through their tax filings to avoid tax troubles in the future.
Note that this guide is quite extensive andwill be updated regularly to accommodate any new rules or guidelines.Therefore, we suggest revisiting this guide regularly to not miss out on these updates.
The SouthAfrican Revenue Service (SARS) does not consider crypto to be legaltender and categorises it as "assets of an intangible nature," whichsignificantly impacts the tax treatment.
Crypto transactions are taxed in SouthAfrica depending on the nature of the transactions.
If the transaction is capital in nature, itis subject to Capital Gains Tax.
Taxpayers receive an annual exclusion of40,000 ZAR and are only taxed on 40% of the total gain at a maximum effectivetax rate of 18%.
This means that individuals pay tax on just 40% of theirprofit, making the tax burden comparatively lighter, particularly for long-terminvestors.
However, this calculation can vary depending on the total taxableincome.
On the other hand, if gains from atransaction are considered revenue income in nature, it is taxed under theexisting income tax laws. This can range from 18% to 45%, placing a higher taxburden on individuals with greater income from cryptocurrency activities.
Note that the tax treatment also depends onwhether the taxpayer is classified as an individual or a legal entity. Fortransactions conducted under a legal entity, such as a company, the corporatetax rate applies, which is typically 28%, although it's reduced to 27% startingMarch 31, 2023. Legal entities are taxed on 80% of cryptocurrency gainsexceeding the 40,000 ZAR tax credit.
However, a caveat to all theseconsiderations is that the tax treatment isn't solely based on these factors.It also depends on whether the investment activities are seen as holding assetsas capital assets or trading stock.
The simple answer would be yes. The SARScan track crypto transactions.
Cryptocurrency exchanges and financialinstitutions are required by the Income Tax Act to share customer details like KYC and investment activity with the authorities.
This means that if anindividual has participated in crypto transactions, SARS can likely accesstheir transaction details.
Moreover, blockchain transactions arestored on distributed ledgers and are visible to everyone, making it easier fortax authorities to use decentralised Web3 tools to link these transactions withthe KYC details and identify any discrepancies in tax reports.
Therefore, we suggest reporting all yourcrypto transactions on your tax report and paying your taxes judiciously toavoid penalties for tax evasion.
It's worth noting that while CGT is a keycomponent of crypto taxation, the specific rules and guidance can be somewhatcomplex. Investors in South Africa pay capital gains tax while traders payincome tax.
One of the essential aspects of CGT inSouth Africa is the tax rate. Capital gains on cryptocurrencies are subject toa maximum effective tax rate of 18%. However, this rate is only applied togains that exceed the annual exclusion threshold. South African taxpayersreceive an annual exclusion of 40,000 ZAR, which means that the first R40,000of capital gains from cryptocurrency transactions are exempt from taxation.
Gains exceeding this threshold are subject to the 18% tax rate, but only afterapplying the exclusion.
The calculation of the effective tax rateis a bit unique and can be favourable for taxpayers. Once capital gains exceedthe 40,000 ZAR exclusion, you are taxed on only 40% of those gains. Forinstance, if you have a total capital gain of 100,000 ZAR, you would only paytax on 40% of the amount exceeding the 40,000 ZAR exclusion limit i.e the taxbase would be equal to 40% of (100,000 ZAR- 40,000 ZAR), which comes out to be24,000 ZAR.
As discussed earlier, the tax implicationsvary based on whether you’re categorised as a trader or an investor. In SouthAfrica, authorities categorise individuals as traders or investors incryptocurrency transactions based on several key factors:
If you intend to hold cryptocurrency as along-term investment, it's seen as an investment. Buying for short-term profitis typically regarded as trading.
The longer you hold crypto, the more likelygains from disposals will be viewed as capital gains.
Frequent transactions suggest trading,especially with a high volume in a tax year.
Large-scale, frequent transactions leantoward trader status.
Active management and trading effortsindicate trading; passive holdings are seen as investments.
If you actively seek profits, they'reconsidered revenue rather than capital gains.
Be aware that intentions can change overtime, affecting your tax treatment.
In South Africa, the capital gains tax(CGT) rate is 18%. This rate applies to gains exceeding the annual exclusion of40,000 ZAR. The actual tax you pay can vary depending on your total taxableincome.
Calculating your crypto gains and losses isa straightforward process. You can use this formula to calculate your cryptogains:
Capital Gains Tax = Disposal Amount –Cost Basis
For those of you who aren’t aware of the term cost basis, it is simply theprice you pay to acquire an asset inclusive of any additional fees liketransaction or gas fees.
Consider the following ledger oftransactions:
12/04/25 - Junior bought 3 BTC for 4,00,000 ZAR each in Binance Wallet
19/08/25 - Junior sold 3 BTC for 4,80,000ZAR each from Binance Wallet
Now,
Disposal Amount = 4,80,000 ZAR (For 1 BTC)
Cost Basis = 4,00,000 ZAR (For 1 BTC)
Capital Gains/Loss = Disposal Amount - CostBasis = 4,80,000 - 4,00,000 = 80,000 ZAR (For 1 BTC)
Total Gains = 3 X 80,000 ZAR = 2,40,000 ZAR
However, the authorities offer a 40,000 ZARtax exemption
Effective gain after exemption = 2,40,000ZAR - 40,000 ZAR = 2,00,000 ZAR
Now, the taxable amount would come out tobe 40% of 2,00,000 ZAR i.e 80,000 ZAR
From a tax perspective, crypto losses aretax-deductible in South Africa.
When you incur losses from your cryptotransactions, you can leverage these losses to offset the gains you’veaccumulated during the same tax year.
Moreover, should you find yourself in asituation where you've accumulated capital losses in a given financial year butlack corresponding capital gains, there's an option to carry forward theselosses to future financial years. This can prove advantageous as you can usethese losses to offset gains in subsequent tax years when they may be moreapplicable.
Note that there is a particular rule knownas the "bed and breakfasting" rule that is used to avoid taxes byproducing fictitious losses. Under this rule, people sell cryptocurrency assetsto deliberately create artificial capital losses and then repurchase themwithin a short timeframe. The SARS has clear guidelines against lossesgenerated through the bed and breakfast rule, where any losses incurred fromassets repurchased within 45 days of the disposal are discarded.
The SARS is yet to release specificguidance regarding the tax treatment of assets lost in scams or stolen byhackers.
However, losses may be claimed in some instances. To claim a capitalloss for lost or stolen cryptocurrency, you must demonstrate that you'vepermanently lost access to your digital assets with little chance of recoveryor compensation.
Strong evidence and documentation are crucial, including anyrelevant reports or communication with authorities.
Normal exclusions and limitations oncapital losses may apply, and South Africa's "ring-fencing of losses undersection 20A" concept could further affect the tax treatment.
From a tax standpoint, there's someflexibility for individuals to offset losses from one business against profitsfrom another, helping to reduce their overall tax burden. However, it's crucialto understand the limitations, especially natural persons. South Africa'sIncome Tax Act, No 58 of 1962 (the Act), Section 20A, outlines specificscenarios where losses from particular trades may be 'ring-fenced.'
This meansthese losses cannot be used to offset income from other businesses conducted bythe same individuals.
Although there’s no way to avoid payingtaxes entirely in South Africa. There are strategies you can employ to loweryour tax bill.
1. Reduce the frequency of transactions
Some taxpayers choose to alter theirtrading strategy to ensure that their profits are classified as capital gainsrather than income. This might involve reducing the number of transactions andholding cryptocurrency for a longer duration.
2. Use your annual exemptions
Individual investors can enjoy tax-free treatment on their first 40,000 ZAR ofcapital gains each year.
3. Use Tax Loss Harvesting
While losing money is not ideal, selling cryptocurrency at a loss can have asilver lining in the form of tax savings. Capital losses can offset capitalgains during the same tax year, and if there's a net loss, it can be carriedforward to offset future gains.
Note that there’s a specific rule calledthe bed and breakfast rule that prevents investors/traders from generatingsuperficial losses. If you have disposed of an asset at a loss and repurchasedthe same asset 45 days before or after the disposal, then that capital losswill be disregarded by the tax authorities.
4. Donate Crypto
Donating cryptocurrency to registeredcharities as a Public Benefit Organization (PBO) is considered tax-deductible.The first 100,000 ZAR of property donated is exempt from Donations Tax.
5. Deduct Any Expenses
Expenses related to acquiring or disposingof cryptocurrency can be added to your base cost, reducing your tax liabilityduring a disposal event.
6. Use tax rebates to lower yourtax bill
South African taxpayers can access variousIncome Tax rebates, depending on their age, potentially reducing their taxbills. Primary rebates start from 17,235 ZAR for all natural persons.
7. Act more like an Investor
To reduce tax liability, individuals canstrategically plan their investment activities to position themselves asinvestors in the eyes of the SARS instead of traders. Investors benefit from anannual exclusion for capital gains, with only 40% of gains subject to tax,while traders do not receive these benefits.
The examples we have used so far areprimitive and are not reflective of real-world transactions, as they are muchmore complex.
For instance, if a trader buys the same asset for differentprices at two separate instances, the task of identifying the cost basis upondisposal of such assets becomes tricky.
That’s why using specialised accountingmethods as specified by local tax authorities is advisable. Although there’s noofficial guidance from the SARS, you likely have to pick one of the followingaccounting methods for your cost-basis calculations.
The FIFO or First-In-First-Out AccountingMethod states that the first asset you buy is the first one you sell, whichessentially means that the acquisition price of the first asset is to be usedas the cost basis upon disposal.
The specific identification method allowstraders to pick the cost basis of their choice given that they can prove whichtoken is being disposed of using the transaction records. Specific transactionIDs are used to identify the transactions and cost basis upon disposal.
Consider the following example:
17/03/25 - Lubanzi bought 1 ETH for 22,000ZAR in Binance Wallet
19/04/25 - Lubanzi bought 1 ETH for 20,000ZAR in Binance Wallet
22/08/25 - Lubanzi bought 1 ETH for 23,000ZAR in Binance Wallet
19/12/25 - Lubanzi sold 1 ETH for 27,000ZAR from Binance Wallet
Let’s say we decide to use FIFO forcalculating the cost basis for this disposal:
According to FIFO, the acquisition price of the first asset is to be used asthe cost basis.
Cost Basis = 22,000 ZAR
Disposal Amount = 27,000 ZAR
Capital Gains = Disposal Amount - CostBasis = 27,000 ZAR - 22,000 ZAR = 5,000 ZAR
When you engage in crypto trading, whereyou frequently buy and sell digital assets, any profits from these transactionsare treated as income. This income is subject to Income Tax, and the tax rateis determined based on your total annual income.
The applicable marginal taxrate is applied to your entire profit from cryptocurrency trading. Essentially,if you're classified as a trader, you'll be subject to Income Tax on theentirety of your trading profits.
Moreover, some cryptocurrency activitiesare subject to Income Tax regardless of whether you're categorised as a traderor investor.
These activities include cryptocurrency mining, earning stakingrewards, receiving income from referral programs related to crypto, and eventhe sale of Non-Fungible Tokens (NFTs) as a creator. If you partake in any ofthese activities to generate income, the profits derived are subject to IncomeTax.
The tax rate applied in these cases dependson your total annual income, with higher incomes incurring higher tax rates.Note that the guidelines around complex transactions like interest income fromDeFi transactions are still unclear.
Therefore, it is advisable to seekguidance from an experienced tax professional to gain more clarity on thesubject.
Listed below are the income tax rates for2026 (March 1, 2025, to February 28, 2026)
Although the majority of cryptotransactions attract tax liabilities in South Africa, some transactions attractno taxes whatsoever!
The following transactions are tax-free inSouth Africa:
Listed below are all taxed cryptotransactions in South Africa:
Crypto mining in South Africa is taxedbased on how it's classified. If you mine crypto as a business, you're subjectto Income Tax based on the fair market value of the crypto on receipt.
Moreover, if you choose to dispose of yourmining rewards in the future, you might face additional tax obligations basedon SARS' categorization of your activities.
If SARS views your mining as a business,you'll owe Income Tax when you dispose of your mining rewards. This tax dependson the relevant Income Tax rates and your total annual income.
If, however, your activities are consideredinvestments, Capital Gains Tax might apply when you dispose of themining rewards. Your tax liability here depends on the change in the valueof the cryptocurrencies from when you received them to when you decide to sell,swap, spend, or gift them.
In a nutshell, South African cryptocurrencyminers must pay Income Tax when receiving mining rewards. Tax responsibilitiescan extend when disposing of these assets, contingent on how SARS perceivesyour activities, whether as trades or investments.
According to a circular promulgated by the South African Reserve Bank, staking activities areconsidered to be different from mining and therefore the tax implications forstaking are different. However, the circular does not mention the specifics ofhow income from staking will be taxed.
Depending on the tax treatment of othercrypto transactions and the existing regulations, it is likely that stakingincome is viewed as ordinary income for tax purposes. This implies that whenyou receive staking rewards, they are likely to be taxed based on the fairmarket value of the cryptocurrency you earned at the time of receipt.
Moreover, when you decide to dispose ofthese tokens by selling, trading, spending, or gifting them, additional taxesmay apply. The specific tax obligations would be determined based on thecapital appreciation or depreciation within the holding period.
Although there is no specific guidance onthe tax implications of receiving tokens from airdrops or hard forks, it issafe to assume that these transactions are taxable.
We are not certain whether tokens received through hard forks attract incometax or not. However, those received through airdrops will be typicallyconsidered income and taxed based on the fair market value of the receivedtokens at the time of receipt. Subsequent taxes may apply if these tokens aredisposed of in the future, depending on any value changes.
Generally, when you give or donate cryptoin South Africa, it's considered a taxable event. The tax base is calculatedbased on the change in the cryptocurrency's value since receipt. This meansthat if the cryptocurrency has appreciated in value from the time ofacquisition, you may be liable to pay tax on the capital gain.
However, there are important exemptions toconsider. If you give crypto to your spouse, this is usually tax-exempt.Moreover, donations to certain Public Benefit Organizations may also beeligible for tax exemption. To qualify for this exemption, the charity must beofficially registered as a Public Benefit Organization (PBO) with the SARS. Insuch cases, the charity should provide a receipt in accordance with section 18Aof the Income Tax Act.
Furthermore, there is a Donations Taxexemption in South Africa. The first R100,000 of property donated by a naturalperson in a given year is exempt from Donations Tax. This exemptionextends to cryptocurrency donations.
There is no specific guidance on how cryptomargin trades, futures, and CFDs are taxed. So we naturally turned tomainstream markets to understand the tax implications of such transactions, butto our surprise, there were no guidelines for more mainstream markets as well.
Therefore, it would be best to seek help from an experienced tax consultant togain more clarity on the subject.
ICOs are special events that allowinvestors to own native tokens from unreleased projects in exchange formainstream tokens like Bitcoin and Ethereum. They are similar to IPOs in theregular securities market.
The SARS has yet to release specificguidelines on the taxation of ICOs. However, since these tokens cannot beviewed as revenue due to their non-recurring nature, ICOs would likely attractcapital gains tax in South Africa upon disposal.
We do suggest seeking help from an experienced tax professional to gain moreclarity on the topic.
Although there is no specific guidance onhow NFT transactions are viewed from a tax perspective, we have analysed the existing guidelines and extrapolated the tax implications. NFTs will mostlikely be subject to taxation based on the nature of the transactions and the taxpayer's classification as a trader or investor.
If you earn revenue from NFTs you'vecreated, your profits are likely to be subject to income tax, especially for primary and secondary sales. If the activity involves swapping of NFTs, aportion of the profits might be subject to capital gains tax.
DAOs are member-owned communities with ashared vision. All the decisions in a DAO are made by the members in the absence of central leadership.
They are new-age institutions that aim todemocratize decision-making and allow people to have a say in decisions thatdirectly affect them. DAOs are often called the soul of Web3 and allow membersto earn rewards in multiple ways.
DAO contributors are rewarded for their contributions to the organization, similar to how centralized organizations paysalaries to their employees. They also pay out bounties for one-time projects and redistribute any profits generated through operations.
Unfortunately, there are no guidelines on whether the compensation received from DAOs is taxable. We suggest seeking help from an experienced tax professional to gain more clarity on the subject.
The SARS is yet to release guidelines regarding DeFi taxation. However, frequent and recurring interest from DeFi protocols may be viewed as income and subjected to income tax rates based on the existing regulations.
Moreover, based on the new tax filingguidelines issued by the SARS, couples in South Africa who are married in a community of property and have interest investments may experience relief.
Theinterest investment certificate will be replicated on both spouses' tax returns and each spouse will be taxed on 50% of the interest income, allowing for afair and equitable tax distribution within the community of property framework.
That being said, there is no officialguidance on the tax treatment of popular DeFi transactions like staking,liquidity mining, and yield farming and we do suggest seeking help fromexperienced tax professionals to better understand how such transactions are taxed.
In South Africa, the tax deadline varies depending on the type of taxpayer:
The tax deadline is typically at the end ofOctober of the year following the tax year. For example, for the 2025/2026 tax year, the deadline would be around the end of October 2026.
The tax deadline typically falls at the end of January of the year following the tax year. So, for the 2025/2026 tax year,the deadline would be around the end of January 2027.
However, the official dates are yet to be announced by South Africa RevenueServices.
You can file your crypto taxes through the SARS eFiling platform, which is the online portal for submitting returns and declarations, makingpayments, and conducting various tax-related interactions.
Although there is no official list ofdocuments for crypto record keeping as specified by the authorities, the SARSmay ask for proof of sale and purchase prices for auditing your tax reports. Therefore, maintaining a record of the following documents is advisable inSouth Africa:
Now that you’re aware of how your cryptotrans actions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:
Once your Tax report is ready, you can download it in PDF format.
We have discussed multiple strategies to avoid paying excess taxes in the section titled “Crypto Tax Breaks South Africa” above. You can revisit the strategies there. Here’s a brief overview of the strategies:
1. Reduce the frequency of transactions
2. Use your annual exemptions
3. Use Tax Loss Harvesting
4. Donate Crypto
5. Deduct Any Expenses
6. Use tax rebates to lower your tax bill
7. Act more like an Investor
1. Is crypto legal in South Africa?
This question would be better phrased as“ Are crypto investments legal in South Africa?” and the answer would be yes.
The fact that South African authorities have established specific regulations and taxation guidelines for cryptocurrencies strongly indicates their legal status. South Africa has taken steps to address the taxation of cryptocurrencies, which reinforces their legality within the country. These regulations provide a framework for individuals and businesses to engage in crypto-related activities while ensuring compliance with tax obligations. Therefore, crypto investments and transactions are legally recognized in South Africa.
2. How is Crypto taxed in South Africa?
Crypto is taxed in South Africa based on whether it's classified as income or capital gains. Income tax applies to activities such as mining and trading. Capital gains tax is applied when cryptocurrencies are held as assets. Specific rates and treatment vary depending on individual circumstances.
3. Is there a capital gains tax in South Africa?
Yes, there is a capital gains tax in South Africa and investments categorised as infrequent and non-recurring are taxed under the capital gains tax rates.
4. How can Kryptos simplify crypto taxes for you?
We’ve already discussed how to file your crypto taxes in the above sections of the guide offering a stepwise breakdown of the entire process. However, we agree that it is unreasonably complicated even for someone with a fair amount of prior knowledge. However, there’s an easy way to file your crypto taxes using a crypto tax software called Kryptos.
All you need to do is log in on the platform, add all your trading accounts, wallets, and Defi accounts, and sip coffee while Kryptos does all the heavy lifting for you. The platform auto-fetches all your transactions from the tax year. It generates a legally compliant tax report within minutes while also suggesting ways to lower your tax bill. It works like magic, all you need to do is try it once.
