THE South African Revenue Service (Sars) has announced that it was part of the 47 jurisdictions around the world who pledged to adopt a new Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD).
CARF is a new international standard on automatic exchange of information between tax authorities, into their domestic law systems.
Under CARF, digital-asset exchanges and other custodians would be required to report information about their account holders’ digital-asset transactions to the tax authorities in their jurisdictions of residence. This information will then be automatically exchanged with the tax authorities in other participating jurisdictions.
Taxpayers who have crypto-assets will be required to report their crypto-asset transactions to the tax authorities accurately and on time. Failure to do so could result in penalties and other adverse consequences.
The other countries that have joined CARF are Armenia, Australia, Austria, Barbados, Belgium, Belize, Brazil, Bulgaria, Canada, Chile, Croatia, Cyprus, the 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, Spain, Sweden, Switzerland, the UK, and the US; the Crown Dependencies of Guernsey, Jersey and the Isle of Man; and the UK’s Overseas Territories of the Cayman Islands and Gibraltar.
In a statement, Sars said: “To keep pace with the rapid development and growth of the crypto-asset market and to ensure that recent gains in global tax transparency will not be gradually eroded, we welcome the new international standard on automatic exchange of information between tax authorities developed by the OECD – the Crypto-Asset Reporting Framework (CARF).
“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 it was working to put CARF into law.
“As jurisdictions that play host to active crypto markets, we therefore intend to work towards swiftly transposing the CARF into domestic law and activating exchange agreements in time for exchanges to commence by 2027, subject to national legislative procedures as applicable.
“In order 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,” it said.
Sars said it invites other jurisdictions to join it with a view to enhancing the global system of automatic information exchange, which leaves no hiding places for tax evasion.
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