South Africa is among 48 countries or territories adopting a Common Reporting Standard to enhance efforts in cracking down on individuals who use crypto assets to evade taxes and engage in money laundering.
In a joint statement on November 11, 2023, the South African Revenue Service (SARS) expressed its approval of the Common Reporting Standard which will facilitate the automatic exchange of information regarding crypto assets among different tax authorities.
MEDIA RELEASE: COLLECTIVE ENGAGEMENT TO IMPLEMENT THE CRYPTO-ASSET REPORTING FRAMEWORK (JOINT STATEMENT)
To keep pace with the rapid development and growth of the crypto-asset market and to ensure that recent gains…
Full statement: https://t.co/cGfh2Hh2na
— SA Revenue Service (@sarstax) November 10, 2023
The apex bank stated that the Crypto-Asset Reporting Framework (CARF) standard would aid in keeping pace with the rapid development and growth of the crypto asset market. It aims to ensure that recent advances in global tax transparency are not gradually eroded.
“The widespread, consistent and timely implementation of the CARF will further improve our ability to ensure tax compliance and clamp down on tax evasion, which reduces public revenues and increases the burden on those who pay their taxes,” Sars said.
The forum facilitates the exchange of data among the tax authorities of different countries enhancing their ability to comprehend the global flow of funds and determining the taxable entities involved. It has previously developed similar reporting standards for other types of assets and transactions.
The framework initially received approval in March 2023 with the 48 countries that embraced this standard recently setting a deadline of 2027 for its incorporation into their respective legal frameworks. During this period, efforts will be directed toward ensuring that local cryptocurrency exchanges align with the specified requirements.
South Africa has expressed its intention to promptly incorporate the CARF into domestic law and initiate exchange agreements within the specified timeframe, contingent upon adherence to national legislative procedures.
“To ensure consistency and a smooth implementation for both business and governments, those of us that are signatory jurisdictions to the Common Reporting Standard will also implement, in line with the above timeline and subject to national legislative procedures as applicable, amendments to this standard as agreed by the OECD earlier this year,” the apex bank indicated.
South Africa, the first country in Africa to declare cryptocurrencies as a legal asset, mandated that crypto exchanges must register for licenses with the Financial Sector Conduct Authority (FSCA) by the conclusion of 2023.
The 48 countries and territories that have agreed to adopt CARF are as follows:
- Armenia
- Australia
- Austria
- Barbados
- Belgium
- Belize
- Brazil
- Bulgaria
- Canada
- Chile
- Croatia
- Cyprus
- Czech Republic
- Denmark
- Estonia
- Finland
- France
- Germany
- Greece
- Hungary
- Iceland
- Ireland
- Italy
- Japan
- Korea
- Liechtenstein
- Lithuania
- Luxembourg
- Malta
- Mexico
- Netherlands
- Norway
- Portugal
- Romania
- Singapore
- Slovakia
- Slovenia
- South Africa
- Spain
- Sweden
- Switzerland
- United Kingdom
- United States of America
- Crown Dependencies of Guernsey, Jersey, and Isle of Man
- United Kingdom’s Overseas Territories of the Cayman Islands and Gibraltar
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