South African crypto investors and service providers talk about legal and tax implications of central bank plan – regulation Bitcoin news
The South African tax consulting firm Tax Consulting SA has said that the recent announcement by the central bank – which will begin regulating cryptocurrencies in 12 to 18 months – has legal and tax implications for both crypto investors and organizations offering intermediary services. However, the company says that the South African Reserve Bank (SARB) “will not interfere in the investment decisions made by crypto investors.”
Intermediaries must register as providers of financial services
According to a South African tax consulting firm, Tax Consulting SA, recent revelations from the central bank’s deputy head that his institution intends to regulate cryptocurrencies in 12 to 18 months, mean that cryptocurrencies will soon be regulated under Financial Advisory and Intermediary Services (FAIS). . » This therefore means that all organizations or individuals who are considered to provide intermediaries or advisory services will be required to register as providers of financial services with relevant bodies.
In a report shared with Bitcoin.com News, Tax Consulting SA predicts that as a next step, SARB will introduce familiarity with customers’ (KYC) procedures and currency control regulations. However, the consulting firm is quick to point out that the South African Reserve Bank (SARB) “will not interfere in the investment decisions made by crypto investors.”
Instead, the central bank will issue the so-called “health warnings” and provide adequate protection to investors who are in danger of losing everything. While acknowledging that SARB has not banned cross-border cryptocurrencies and investments, the consulting firm insists that investors must continue to comply with certain reporting standards.
Tax consequences
The tax firm’s report meanwhile warned of possible tax implications that may arise as crypto investors need to be aware of. The reports say:
Another concern will be in relation to tax compliance, for example, as tax evasion will be much easier to detect with transactions that fall under the SARB’s Financial Intelligence Center (FIC).
Once the regulatory framework is in place, non-compliance will be easier to detect, and at that point, South Africa’s “wild west” crypto industry will be a thing of the past, the report concludes. Tax Consulting SA also warns that during this period before the introduction of the regulatory regime, “crypto-investors [need] to ensure that they are up to date with their compliance obligations. “
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