By Chris Herbst, Chartered Business Accountant in Practice (CBAP) with CIBA, General Tax Practitioner (GTP) with SAIT, Stellenbosch University. Team registered with SAIT, SAIPA and CIBA.
Crypto is the part of a South African tax return where people most often look for outside help. A year of trades on Luno or VALR, a few coins moved to a hardware wallet and some staking rewards can turn into thousands of rows that need rand values, matched transfers and a gain or loss on every disposal. The natural next question is who is allowed to do that work for you, and how you know the person is properly registered. This guide answers it for South African tax residents, using section 240 of the Tax Administration Act 28 of 2011 and what SARS publishes on its tax practitioner pages. Readers who are not South African tax residents are served by CountDeFi (https://www.countdefi.com).
Do you need a tax practitioner for crypto tax in South Africa?
No. You may complete and submit your own ITR12, crypto included, and nothing in the Act obliges an individual to appoint a practitioner. SARS states on its crypto assets page that normal income tax rules apply to crypto assets, that affected taxpayers declare crypto gains or losses as part of their taxable income, and that the onus is on the taxpayer to declare all crypto-related taxable income in the year it is received or accrued.
When does it make sense to get help?
Help pays for itself when the record is the hard part: several exchanges, transfers between your own wallets, DeFi or staking activity, missing history from a platform that has closed, or a SARS verification letter asking you to support the figures already filed. In those cases the work is the reconstruction, not the typing of totals into eFiling.
What does the law regulate, then?
The law regulates the person who helps you, not your choice to get help. Section 240 sets out who must register before giving tax advice or completing returns for other people, and section 240A sets out which bodies may act as recognised controlling bodies. Both are part of the Tax Administration Act.
What does section 240 of the Tax Administration Act require?
Section 240 requires a natural person to register as a tax practitioner if that person provides advice to another person on the application of a tax Act, or completes or assists in completing a return for another person. SARS sets this out on its Register as a Tax Practitioner page, together with the requirements a person must meet to register.
What are the registration requirements?
SARS lists three requirements on its registration page. The person must belong to, or fall under the jurisdiction of, a recognised controlling body as referred to in section 240A. The person must meet the minimum qualifications and experience set by that controlling body. And the person must have no criminal convictions for the offences described in section 240(3).
Who is exempt from registering?
Section 240(2) exempts a person who helps for no consideration, a person who gives tax advice in anticipation of or during litigation where the Commissioner is a party, a person whose tax advice is an incidental or subordinate part of providing goods or other services, a full-time employee who does the work for their own employer, and a person working under the direct supervision of a registered tax practitioner. SARS summarises each exemption on its registration page.
Can a registered practitioner lose registration?
Yes. SARS states that a person may not register, or remain registered, if certain events happened in the preceding five years, including removal from a legal, accounting, tax or related profession by a professional body or a recognised controlling body for serious misconduct. The full list is on the SARS registration page.
What is a recognised controlling body?
A recognised controlling body (RCB) is the professional body that admits and oversees tax practitioners. SARS explains on its controlling bodies page that an organisation qualifies either by being listed in section 240A of the Tax Administration Act or by being recognised by SARS, and that the framework exists to make sure practitioners are properly qualified and that taxpayers and SARS have a way to address misconduct.
What does an RCB require of its members?
SARS's criteria for recognition require the body to maintain minimum qualifications and experience requirements, continuing professional education, codes of ethics and conduct, tax compliance of its members, and a disciplinary process. Those are the protections you gain by using a registered practitioner.
How does registration with SARS work?
SARS describes a three-step process on its tax practitioner registration process page: the RCB initiates the registration on eFiling, the member captures or updates their details, and the member selects the RCB and applies to SARS. If SARS approves the application it issues a Tax Practitioner Number, the PR number, and the practitioner activates practitioner status on eFiling.
How do you check that a crypto tax practitioner is registered?
Ask for the practitioner's PR number and the name of their controlling body, then confirm both. SARS states on its tax practitioners page that it is in the interest of taxpayers to use registered tax practitioners, and it links to an online database where you can check whether a practitioner is registered.
What should the practitioner give you?
A PR number issued by SARS, the controlling body they belong to and their membership details with that body. A registered practitioner provides these without hesitation, because both registrations are a condition of doing the work at all.
What if the person is not registered?
Do not give them access to your eFiling profile. SARS lists acting as a tax practitioner without being registered as one of the grounds for reporting a practitioner on its section 241 reporting page.
Does crypto experience show up in the register?
No. Registration proves that the person is qualified and accountable to a controlling body. It does not show whether they have reconciled a multi-exchange crypto history before, so ask how they handle transfers between your own wallets, missing transaction data and rand values for trades between two crypto assets.
What does a practitioner do with your crypto records?
A practitioner turns your exchange and wallet exports into figures that belong on the ITR12. SARS's crypto assets page identifies three ways crypto is acquired or disposed of, each with its own tax consequences: mining, exchanging local currency for crypto or the other way round on an exchange or privately, and exchanging goods or services for crypto, which follows the barter rules.
Which records does the work start from?
- Transaction history exports from every exchange you used, for every year that affects the return.
- Public wallet addresses for self-custody wallets.
- Records of staking, lending or mining rewards.
- Any IT3 certificates or statements a platform issued.
Our guide to IT3(b) and IT3(c) certificates explains why many crypto platforms do not issue them.
How is the gain worked out?
Each disposal is matched against what the asset cost, in rand, on the date it was acquired. Our guide on calculating crypto capital gains in South Africa works through the method step by step, and our guide on crypto losses on your tax return covers the loss side.
Can expenses be claimed?
SARS states on its crypto assets page that a taxpayer may claim expenses associated with crypto accruals or receipts, provided the expenditure is incurred in the production of the taxpayer's income and for purposes of trade, as the Income Tax Act 58 of 1962 requires.
Is crypto taxed as income or as a capital gain?
That depends on your own facts. SARS's crypto assets page states that income from crypto transactions is taxed on revenue account under gross income, or, where the gains are capital in nature, under the Eighth Schedule to the Income Tax Act as a capital gain.
Which tests decide the character?
The question turns on your intention when you acquired the asset, how long you held it, how often and how systematically you traded, how you funded the purchases and the other facts SARS weighs. The character is decided on the taxpayer's own facts, and a practitioner sets those facts out so the return reflects them. No rule of thumb settles it for every holder.
Why does the character matter?
A revenue gain is included in taxable income in full, while a capital gain goes through the Eighth Schedule, where the annual exclusion and inclusion rate apply. The same trade therefore produces a different amount of tax depending on its character, which is why the facts behind it need to be documented.
How does SARS know about your crypto?
SARS states on its crypto assets page that the Income Tax Act gives it a wide range of collection powers, including a requirement for third-party service providers to submit financial data. Exchange reporting is growing, which our guides on Luno SARS reporting and CARF reconciliation and CARF self-certification on South African exchanges cover.
What if earlier years were never declared?
SARS warns on its crypto assets page that failing to declare crypto income can result in interest and penalties. Our guide to the SARS Voluntary Disclosure Programme for undeclared crypto explains how earlier years are put right.
What if SARS asks for supporting documents?
A verification request on a return with crypto is answered with the reconciliation behind the figures, not with screenshots of balances. Our guide on SARS verification supporting documents lists what to upload.
What are the steps to appoint a tax practitioner on eFiling?
Appointing a practitioner gives them access to your tax types through their own eFiling practitioner portfolio. SARS describes the process on its adding clients to a tax practitioner's eFiling profile page.
- Confirm registration. Ask for the PR number and controlling body, and check the practitioner on the SARS online database linked from the SARS tax practitioners page.
- Agree the scope. Confirm which years and which returns the practitioner will prepare, for example the ITR12 and each IRP6, and which exchange and wallet records you will provide.
- Practitioner captures your details. On eFiling the practitioner opens the Tax Practitioner Portfolio, selects Organisations, then Register New, captures your details and requests your tax types on the Manage Tax Types screen.
- You authorise the request. You open the Tax Type Transfer webpage, complete the Shared Access Request screen, enter the one-time PIN sent to your email or cell number, and select Authorise for each tax type. SARS issues a power of attorney for that authorisation.
- Provide the crypto records. Export the full transaction history from every exchange and list every wallet address, for every year in scope.
- Review before submission. Read the crypto figures and the ITR12 before the practitioner submits, and keep the reconciliation with your own records.
What does the practitioner see on your eFiling profile?
The practitioner sees the tax types you authorise on the Tax Type Transfer screen. SARS's eFiling guidance shows that the tax types stay inactive in the practitioner's portfolio until you authorise them, after which their status reads Successfully Activated.
Can you remove a practitioner later?
Yes. Access is granted per tax type through the shared access process, and the Manage Tax Type Transfer option on eFiling is where transfers are managed. Change your eFiling password if you shared login details with anyone, which you should never need to do with a registered practitioner.
Does appointing a practitioner shift responsibility for the return?
No. The onus to declare crypto income stays with you, as SARS's crypto assets page states. The practitioner prepares and submits on your instruction, and you remain the taxpayer SARS assesses.
Common mistakes when choosing a crypto tax practitioner
Most problems trace back to one of these.
- Not checking the PR number: Risk: Unregistered preparer; Fix: Check the SARS database
- Sharing your eFiling password: Risk: Uncontrolled access; Fix: Use Tax Type Transfer
- Sending one exchange only: Risk: Missing cost of acquisition; Fix: Export every platform
- Ignoring wallet transfers: Risk: Transfers read as disposals; Fix: List every wallet
- Skipping the review: Risk: Errors filed in your name; Fix: Read the return first
Why is sharing a password a mistake?
The eFiling shared access process exists so that a registered practitioner never needs your login details. SARS issues a power of attorney through that process, which records exactly which tax types you authorised.
Why does a partial record cause problems?
Crypto moved from one exchange to another arrives without its purchase price. If only the second platform's history is provided, the coins look like they cost nothing, and the gain on their sale is overstated. Every platform's history is needed to carry the cost across.
What about provisional tax?
If you trade crypto outside a salary, you file IRP6 returns as well as the ITR12 unless an exclusion applies. Our guide on IRP6 vs ITR12 explains how the two fit together, and our provisional tax service covers the IRP6 side.
How do you report a crypto tax practitioner to SARS?
Anyone can report a tax practitioner by completing the Reporting of Unprofessional Conduct (RUC001) form and emailing it to SARS, as set out on SARS's section 241 page.
What can be reported?
SARS lists four grounds: the person is not registered yet operates as a tax practitioner, their conduct is unprofessional, their conduct is unlawful, or they do not act in the taxpayer's interest where that interest is reasonable and within the law.
What happens after a report?
SARS investigates, notifies the taxpayer and the practitioner of its intention to complain to the controlling body, and gives both 21 business days to object. If no objection succeeds, SARS lodges the complaint with the controlling body, which investigates under its own process and informs SARS of the outcome. The steps are on the SARS section 241 page.
Do You Need Help With Section 240?
CH Consulting prepares crypto tax for South African tax residents: we reconcile your exchanges and wallets, calculate gains and income, and declare them on your ITR12 and IRP6 returns. Chris Herbst is registered as set out above, and you are welcome to check before you appoint us. See how our crypto tax service works, compare the crypto tax packages, browse more crypto tax guides, or contact us to book a call.
