SARS are leveraging their powers under the Tax Administration Act, which provides for instances in which the Directors, Public Officers, or other representative taxpayers, can be held personally liable for a company’s tax debt!
André Daniels
Head of Tax Controversy & Dispute Resolution
For taxpayers who have failed to declare crypto income or gains in previous years, this development leaves very little time to act. The Voluntary Disclosure Programme (VDP) is the only safe harbour available, but only if taxpayers make use of it before SARS is informed of your crypto affairs through the CARF and CRS.
Why VDP matters now more than ever
The VDP is a legislated mechanism that allows taxpayers to come forward voluntarily, disclose undeclared income tax liabilities, and in return benefit from:
The requirements for a valid VDP application, per s227 of the Tax Administration Act, No. 28 of 2011 (TAA) are:
“227. Requirements for valid voluntary disclosure
The requirements for a valid voluntary disclosure are that the disclosure must—
This protection hinges on timing. Once SARS is in possession of the data and is aware of your default, a VDP disclosure is no longer be considered voluntary. At that point, SARS will pursue full penalties and prosecution where appropriate.
Nowhere to hide after 2026
CARF was developed by the Organisation for Economic Cooperation and Development to address the rapid growth of crypto markets worldwide, ensuring that digital assets are treated with the same transparency as traditional financial accounts. It requires crypto service providers to report users’ transactions, with that data automatically exchanged across jurisdictions.
At the same time, the revised CRS broadens the scope of existing financial reporting to cover new products, including electronic money and Central Bank Digital Currencies. Together, these frameworks will close the gaps that taxpayers once relied on to shield their offshore activities.
In short, SARS will no longer need to investigate or rely on disclosures – the information will arrive automatically.
SARS is ready, are you?
SARS has been steadily regaining its reputation as one of the world’s most effective revenue authorities. Commissioner Edward Kieswetter has repeatedly emphasised that compliance is made simple for those who engage correctly. However, SARS has also shown that it is uncompromising with those who do not.
For South Africans involved in crypto, the message is clear: the days of hiding behind the supposed anonymity of blockchain and digital assets are numbered.
The clock is ticking
The VDP is not just an option, it is the only safe route for taxpayers with undeclared income to come clean with SARS before 2026. Once CARF and CRS reporting goes live, SARS will already have your crypto information, and it may be too late to claim the relief of a voluntary disclosure available under the TAA.
Waiting is not a strategy, it is an invitation for SARS to impose the full weight of penalties, interest, and even criminal prosecution.
The message is clear: act now! File a VDP application with the assistance of a suitably skilled tax attorney, regularise your affairs, and protect yourself and your assets before SARS makes the first move.
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