South Africa's Revenue Service (SARS) released draft guidance on taxing crypto assets under the existing Income Tax Act, 1962, inviting public comment until August 31, 2026.

The guidance clarifies that crypto is treated as an intangible asset rather than currency or foreign currency, subjecting trades, swaps, payments, mining, staking, airdrops, hard forks and other activities to income tax or capital gains tax depending on the taxpayer's facts and intentions.

SARS notes that tax treatment varies based on holding period, frequency of trading, and intended use; frequent traders may be taxed as income, while long-term holders may qualify for capital gains. The draft also addresses donations, which may be subject to donations tax, and specifies that VAT is outside the scope of the guidance.

The proposal follows South Africa's adoption of the Crypto-Asset Reporting Framework (CARF), which requires crypto service providers to collect and report user and transaction data to SARS for the reporting period March 1 2026 to February 28 2027. Individual taxpayers must still report crypto transactions in their regular tax returns, and failure to do so may incur interest and penalties.

The public comment period allows stakeholders to review the draft before SARS finalizes the guidance; no new crypto tax law is being created.