The South African Revenue Service (SARS) is strengthening its ability to monitor taxpayers who hold crypto assets or offshore financial interests. From 1 March 2026, new global reporting standards will allow SARS to receive detailed financial information about digital assets and cross-border accounts, making it much easier to detect undeclared income or incorrect tax reporting.

These changes form part of a broader international effort to improve tax transparency and reduce tax evasion.

The new Crypto-Asset Reporting Framework (CARF) requires crypto service providers to collect and submit detailed information about users and their transactions.

This includes data on:

1. Crypto purchases and disposals

2.Transfers between wallets

3. Conversions between crypto assets

4. Account and user identification details

This information will be shared using standardised international reporting systems, meaning SARS will now have far greater visibility into taxpayers’ crypto activities.

As a result, crypto transactions will no longer exist in isolated systems but will form part of a global financial reporting network used by tax authorities.

At the same time, the Automatic Exchange of Information (AEOI) framework has been expanded. Under this system, foreign financial institutions share taxpayer information with tax authorities worldwide.

Because SARS is connected to this international network, it will receive financial data from offshore banks, investment accounts, and other cross-border financial structures.

This means taxpayers who previously believed offshore assets or digital holdings were difficult for tax authorities to detect may now face greater scrutiny.

With the introduction of these new reporting frameworks, SARS will be able to compare taxpayer declarations with third-party financial data more accurately.

This allows the revenue authority to:

1.Identify discrepancies in tax returns

2.Detect undeclared crypto profits or offshore income

3.Select taxpayers for audits more efficiently

Once transaction data is available in a structured format, SARS can automatically match it against declared income, making non-disclosure or incorrect reporting easier to detect.

Taxpayers should also understand that profits from crypto transactions are not always treated the same way for tax purposes.

Depending on the circumstances, crypto income may be taxed as:

1.Revenue (ordinary income) if trading activity is involved

2.Capital gains if the assets were held as long-term investments

The correct tax treatment depends on factors such as the taxpayer’s intention, the nature of the transactions, and the frequency of trading.

Incorrect classification of crypto income could therefore lead to disputes with SARS.

Taxpayers who have previously failed to declare crypto or offshore income may consider making use of the Voluntary Disclosure Programme (VDP). This programme allows taxpayers to correct past non-compliance before SARS initiates an investigation.

Once SARS identifies discrepancies using third-party data, taxpayers may face understatement penalties, interest charges, and lengthy disputes.

Addressing potential issues early can significantly reduce these risks.

If you have crypto investments, offshore assets, or cross-border financial interests, it is important to ensure that your tax affairs are correctly structured and fully compliant with SARS requirements.

At Leozzy Accounting, we assist individuals and businesses with:

1. Crypto tax reporting and compliance

2. Offshore income tax declarations

3. Capital gains tax on digital assets

4. Voluntary Disclosure Programme applications

5. SARS tax audits and advisory services

Our experienced team can help you review your financial position and ensure your tax reporting aligns with the latest SARS regulations.

📞 Contact Leozzy Accounting today for professional assistance with crypto and offshore tax compliance.