Amendment of the term “cryptocurrency”
The word “cryptocurrency” was replaced with “crypto asset” in section 1 of the Income Tax Act
According to the Explanatory Memorandum on the Taxation Laws Amendment Bill (20 January 2021), the section 1 of the Income Tax Act (IT Act) definition of “financial instrument” includes any cryptocurrency (paragraph f). Accordingly, the word cryptocurrency was replaced by the term “crypto asset” in line with the proposed adoption of a uniform definition of crypto assets within the South African regulatory framework. It should be noted however, that the VAT Act still refers to cryptocurrency.
Neither crypto asset, nor cryptocurrency is defined in the any of the Tax Acts. Per the SARS website, a crypto asset is a digital representation of value that is not issued by a central bank, but is traded, transferred and stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility, and applies cryptography techniques in the underlying technology.
Find a copy of the Explanatory Memorandum (20 January 2021) here.
02/09/2021
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