South African tax consulting firm Tax Consulting SA, a recent announcement by the Central Bank – which will begin regulating cryptocurrencies in 12 to 18 months – provides brokerage services to crypto investors and It said there will be legal and tax implications for both organizations. However, the company said that the South African Reserve Bank (SARB) “will not interfere with investment decisions made by crypto investors.”
Intermediaries must register as financial service providers
According to Tax Consulting SA, a South African tax consulting firm, the central bank deputy governor recently revealed that the agency intends to regulate cryptocurrencies within 12 to 18 months, meaning that crypto “will soon be regulated under the Financial Advice and Intermediary Services (FAIS) Act . will soon be regulated under the Financial Advice and Intermediary Services (FAIS) Act. This therefore means that any organization or individual deemed to be offering intermediary or advisory services will be required to register as a financial service provider with the relevant agency.
In a report shared with Bitcoin.com News, Tax Consulting SA predicts that the next step is for the SARB to introduce Know Your Customer (KYC) procedures and exchange control regulations. However, the consulting firm is quick to point out that the South African Reserve Bank (SARB) “will not interfere with investment decisions made by crypto investors.”
Instead, the central bank will issue so-called “health warnings” to provide adequate protection to investors who are in danger of losing everything, while acknowledging that the SARB has not outlawed cross-border crypto trading and investment. consulting firm insists that investors still need to comply with certain reporting standards.
Meanwhile, the tax firm’s report warns of potential tax consequences that may arise, which crypto investors must be aware of. The report states.
Another concern relates to tax compliance, as tax evasion is more easily detected in transactions under the jurisdiction of the SARB’s Financial Intelligence Centre (FIC), for example.
Once a regulatory framework is in place, the report concludes, it will be easier to detect non-compliance, at which point South Africa’s “Wild West” crypto industry will be a thing of the past. Tax Consulting SA has also found that during this pre-regulatory regime introduction period, it warns that “crypto investors (among others) need to be up-to-date on their compliance obligations.”
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