SARS issued a substantially expanded Guide to the Voluntary Disclosure Programme (Issue 2) in May 2026, and on 28 July 2026 commentators warned that declaring crypto for the first time on a 2025-2026 return will most probably expose you to an audit, at which point the VDP door closes. The Crypto-Asset Reporting Framework took effect on 1 March 2026, so the years you would disclose today are years SARS cannot yet see.
I’m Chris Herbst, Managing Director at CH Consulting. I hold the CBAP(SA) designation as a Practising Member of the Southern African Institute of Business Accountants and the GTP(SA) designation as a Practising Member of the South African Institute of Tax Professionals. Our practice rebuilds multi-year exchange and wallet histories for South African individuals, quantifies the understatement per year of assessment, and prepares the VDP01 and its supporting schedules for submission.
What is the SARS Voluntary Disclosure Programme and does it cover undeclared crypto?
The Voluntary Disclosure Programme is a permanent statutory process in Part B of Chapter 16 of the Tax Administration Act 28 of 2011, sections 225 to 233, and it applies to all taxes administered by SARS except the customs and excise legislation, which includes undeclared crypto asset income and gains under the Income Tax Act.
Crypto is not a separate tax type. It runs through the ordinary ITR12 architecture, either as capital gains or as trade income, so a crypto default is an income tax default and sits squarely inside the general VDP. SARS’s Crypto Assets and Tax page puts the position plainly: “The onus is on taxpayers to declare all crypto assets-related taxable income in the tax year in which it is received or accrued. Failure to do so could result in interest and penalties.”
What relief does section 229 actually give you?
Section 229 gives relief from understatement penalties, from qualifying administrative non-compliance penalties, and from criminal prosecution for the disclosed default. It does not touch interest. For a client whose defaults stretch back several years, we have seen the interest component exceed the capital tax itself, and that is the commercial heart of the problem.
Does the customs VDP change anything for an individual?
The Tax Administration Laws Amendment Act 4 of 2026 inserted a new section 227(g), so a disclosure may not constitute an “underpayment” as defined in section 77Z of the Customs and Excise Act. Chapter XB of that Act creates a separate customs and excise VDP that comes into effect on a date to be determined by the Minister of Finance by notice in the Government Gazette. For a pure crypto exposure this matters only if part of your liability is import VAT or duty, which cannot be rolled into the general VDP.
What makes a disclosure still “voluntary” once SARS holds CARF and CRS data?
A disclosure is disqualified automatically only where SARS has issued a Notification of Audit under section 42 of the Tax Administration Act, so CARF data sitting unanalysed in a SARS database does not of itself make your disclosure involuntary; SARS acting on it does.
What did Purveyors decide, and how far does it reach?
In Purveyors South Africa Mine Services (Pty) Ltd v CSARS (2021) ZASCA 170, handed down 7 December 2021, the Supreme Court of Appeal held there can be no prior knowledge on the part of SARS of a tax default, regardless of the source of that knowledge, for a valid section 227 disclosure. The narrow reading is that this concerns knowledge of your specific default, typically acquired through your own informal engagement with SARS. The wide reading is that structured third-party data attributable to you amounts to knowledge. Neither reading has been tested against CARF, and we do not present the question as settled.
Is a verification letter the same as an audit for VDP purposes?
No. Commentary on the expanded guide notes that inspection and verification are not “audits” for the section 226(2) disqualification, but where a verification or inspection causes you to discover your own default, the disclosure of that default fails the voluntary test in section 227(a). The threshold for SARS to invoke section 40 and select you for audit, verification or inspection has been described in case law as extremely low. Our guide to SARS verification of supporting documents sets out what those letters look like in practice.
Is there a way to test the water without naming yourself?
Section 228 provides for a no-name voluntary disclosure, and it is under-used. Where the voluntariness question is genuinely uncertain, a no-name approach lets you obtain SARS’s view on the facts before you identify the taxpayer.
Can the SARS Voluntary Disclosure Programme reach into years I thought were prescribed?
SARS’s own position in Issue 2 of the guide is that it can: “An applicant should therefore include in a disclosure, a default that occurred in any tax period, including a default relating to a tax period that may have ordinarily prescribed under section 99(1) or (2). The facts of the specific case will dictate whether the prescription rules under section 99 apply.”
What does section 99 actually say?
Section 99 time-bars income tax assessments three years after the date of an original assessment, and five years for VAT self-assessments. Section 99(2) lifts that bar to the extent that the shortfall was due to fraud, misrepresentation or non-disclosure of material facts.
Why does this hit undeclared crypto harder than most defaults?
A taxpayer who filed ITR12s for older years and left crypto out entirely has, on any ordinary reading, made a non-disclosure of material facts, which is the section 99(2) trigger. On that analysis prescription probably never attached, and the structural objection that SARS cannot bootstrap itself into closed years offers limited comfort.
Is the position different if I declared crypto but got the characterisation wrong?
It may well be. A taxpayer who disclosed crypto disposals on capital account, and whom SARS now says was trading, adopted a tax position on disclosed facts. The section 99(2) hook is considerably weaker there, and the two situations warrant different advice. What a section 232 assessment does to prescription for an otherwise closed year, and whether such an assessment is open to objection and appeal, we could not verify, so we treat it as an open question.
Does the SARS Voluntary Disclosure Programme cover interest on undeclared crypto?
Interest is not part of section 229 relief, and whether you can apply separately for interest remission alongside a VDP application is not yet law as at the date of this article.
The 2026 Budget Speech delivered on 25 February 2026 proposed permitting VDP applicants to apply simultaneously for separate remission of interest under the relevant tax Act, with effect from 1 March 2026. Issue 2 of the SARS guide, published in May 2026, is silent on interest relief. The enabling clause appears as Clause 14 of the 2026 Draft Tax Administration Laws Amendment Bill, published on 30 July 2026 with comment closing 28 August 2026.
Why the sequencing is one-shot
In CSARS v Medtronic International Trading S.A.R.L. [2024] ZACC 26, handed down 20 December 2024, the taxpayer submitted a request for remission of interest under section 39(7) of the VAT Act after concluding a voluntary disclosure agreement, SARS refused to consider it, and the Constitutional Court held for SARS. The practical consequence is that any interest remission request has to be made simultaneously with the disclosure, not afterwards.
The fork in the road this quarter
One view is that you file now and lodge the simultaneous remission request, on the basis that the amendment is expected to carry a 1 March 2026 effective date. The competing view is that until the Act is signed there is no statutory foothold and SARS may lawfully decline to consider the request, leaving your interest locked in once the agreement is signed. A third option is to wait for promulgation, which preserves the interest argument but risks losing voluntariness in the interim. Which provision an individual income tax applicant would invoke, whether section 89quat of the Income Tax Act or Chapter 12 of the Tax Administration Act, we could not verify and do not assert.
What are the actual deadlines pressing on this decision?
Four dates converge in the current quarter, and they run in a specific order: the filing deadlines for the 2026 year of assessment, the close of comment on the draft crypto guide and the draft Bill, and the CARF reporting timetable that begins to bite in 2027.
- 23 October 2026: What happens: Non-provisional ITR12 deadline; Status for VDP purposes: Filing first can end voluntariness
- 22 January 2027: What happens: Provisional taxpayer deadline; Status for VDP purposes: Practical outer marker
- 28 February 2027: What happens: First CARF period ends; Status for VDP purposes: No CARF data before 1 March 2026
- 31 May 2027: What happens: First CARF return due at SARS; Status for VDP purposes: Matching sequence unclear
The SARS phased Filing Season 2026 media release confirms Auto Assessment from 1 to 12 July 2026, the broader filing period from 13 July to 23 October 2026, and provisional taxpayers and trusts until 22 January 2027. Our summary of the Filing Season 2026 deadlines covers the mechanics. Separately, SARS’s CARF page confirms that the first reporting period runs from 1 March 2026 to 28 February 2027, the return is due by 31 May 2027, the first international exchange takes place in September 2027, and “Individual taxpayers do not report directly under the CARF”.
How do I apply for the SARS Voluntary Disclosure Programme for crypto, step by step?
You reconstruct every year first, quantify the understatement, then file the VDP01 on eFiling from the Voluntary Disclosure Work Page before SARS touches your crypto position.
- Pull complete histories. Download statements per wallet, per year of assessment running 1 March to end February, from every exchange and wallet you have used. On Luno that means opening each wallet and using Download Statement, then repeating for ZAR, BTC, ETH, USDC and savings wallets. Our Luno reconciliation walkthrough sets out the file shapes.
- Include swaps and internal transactions. Crypto-to-crypto trades and internal platform movements are disposals, not just fiat withdrawals.
- Classify each year as revenue or capital, or split, applying the ordinary intention and frequency tests.
- Fix a base cost method and apply it consistently across every year in the application. See our crypto capital gains calculation guide.
- Quantify the understatement per year of assessment and per tax type, and model the net position across periods.
- Register for eFiling if you are not registered. SARS states the VDP01 is accessed through eFiling and cross-refers to external guide GEN-ELEC-18-G01 for registration.
- Open the Voluntary Disclosure Work Page and complete the VDP01. The form has Back, Save and File buttons; saved forms appear under Saved Applications and filed forms under History. Where you are a registered eFiler, the declaration section does not need separate completion.
- Attach your schedules, the per-year reconstruction, the base cost method note and the explanation for any estimates.
- Lodge any interest remission request at the same time if you decide to make one, given Medtronic. File it with the VDP01, never after.
- Sign the section 230 voluntary disclosure agreement, after which SARS raises assessments under section 232.
SARS’s latest news item of 8 December 2025 confirms you “Apply using VDP01 form on eFiling or via a SARS branch appointment”, and its VDP page lists a VDP telephone number of 0800 864 613. The external guide records that the VDP01 and its supporting documents are not shared with any other division of SARS, and that the Voluntary Disclosure Unit can be visited by prior appointment.
What must be true for the VDP01 to be valid?
Section 227 requires that the disclosure be voluntary, involve a “default” as defined in section 225, be full and complete in all material respects, involve a behaviour listed in column 2 of the section 223 understatement penalty table, not result in a refund due by SARS, be made in the prescribed form and manner, and not constitute a customs underpayment under section 77Z.
What counts as a “default”?
Section 225 defines it as the submission of inaccurate or incomplete information to SARS, the failure to submit information, or the adoption of a tax position, where that resulted in an understatement.
The five-year similar-default bar
Section 227(b) requires the default “not have occurred within five years of the disclosure of a similar ‘default’ by the applicant or a person referred to in section 226(3)”. A client who ran a VDP for undeclared offshore investment income recently may be blocked.
The refund trap
A disclosure that results in a refund due by SARS is disqualified, and this is generally evaluated on a net basis where several tax periods are involved. A large loss year sitting inside a multi-year crypto disclosure can flip the aggregate. Model it before you file, and read our note on crypto losses on your tax return.
What does SARS already hold, and how does a mismatch show up?
SARS holds no CARF report covering any period before 1 March 2026, which is the entire reason a disclosure for earlier years remains worth doing, but it already receives substantial third-party data through the IT3 architecture and, from offshore, through CRS.
What CARF will deliver, and when
Reporting crypto-asset service providers with a South African nexus must submit user identity, tax residence and per-asset transaction data, with amounts reported in South African Rand under the CARF Regulations, Notice R.6887, Government Gazette No. 53735 of 28 November 2025. SARS confirmed on 6 March 2026 that South Africa implemented CARF on 1 March 2026. If you have not yet completed a self-certification on your exchange, our note on CARF self-certification explains the form.
Why no exchange gives you a tax certificate
South African crypto platforms typically do not issue IT3(c) certificates, even though SARS publishes a clarification document for IT3(c) reporting of base cost for crypto assets. That document tells you the form contemplates crypto; it does not establish that any platform files one. We covered this in why IT3(b) and IT3(c) forms are not supplied by crypto platforms.
The asymmetry that produces the letter
A CARF report gives SARS your gross amounts received. It does not give SARS your base cost. So the first mismatch SARS sees is proceeds, and the number you have to defend is cost. Where your declared disposals fall materially below the aggregate, expect a verification, and on the reasoning in the 28 July 2026 commentary, a verification of the current year is exactly what surfaces the earlier ones. SARS also flagged “Less capturing, more prefilled data” for Filing Season 2026, with investment income already populated.
Where does a crypto VDP reconstruction go wrong?
The failures we see are almost never about the law; they are about records, sequencing and inconsistency across years.
Filing the 2026 return first
This is the most expensive available mistake. The 28 July 2026 commentary is direct that a first-time crypto declaration on the 2025-2026 return will most probably attract an audit, after which relief from penalties and criminal prosecution is off the table.
Treating a wallet statement as a tax pack
A single trade is split across unlinked rows in two different wallet files, with fees buried inside the amounts, while the CARF record is one classified event net of fees. Reshaping the export is the actual work.
Mixing base cost methods between years
SARS’s IT3(c) clarification document states that base cost of the same crypto assets held on capital account “must be determined by using either the specific identification method or the first-in-first-out method”. Its “identical assets” language arguably points toward weighted average, which the document does not name, so the position is not clean. Pick one method, apply it to every year in the application, and document the choice in the submission.
Assuming nothing happened without a bank withdrawal
Clients who never took money out routinely have hundreds of disposals across seven years, from swaps and internal platform transactions alone.
Dead exchanges and no records
Issue 2 records that “Should the applicant not be in possession of all of the supporting documentation, the VDP Unit may consider reasonable estimates”. That is a discretionary and unquantified standard. Document contemporaneously why the records are unavailable and how you estimated. Blockchain explorers can reconstruct on-chain movements; they cannot reconstruct the Rand price on a defunct order book.
Currency conversion divergence
The CARF Regulations require conversion at the time of each relevant transaction in a manner consistently applied by the provider. Your reconstruction will likely use a different rate source and timestamp convention. Expect divergence and be ready to explain it.
Underestimating the reaction to prescribed years
A client who has mentally written off older years will not take well to being told the guide says include them. Raise it in the first meeting, not after the reconstruction invoice.
Is the revenue versus capital call a problem inside a VDP?
It is the least predictable part, because you must adopt a position for every year before SARS has said anything, and SARS’s page confirms the determination “is tested under existing jurisprudence”.
What if my behaviour genuinely changed?
Disclosing earlier years as capital and later years as revenue asserts a change in intention that SARS may reject. Whether a wrong-but-honest characterisation is a disclosed tax position or a failure of the “full and complete” requirement is not resolved in any SARS statement we located, so we set it out as a live risk rather than a settled answer.
Where does crypto go on the ITR12?
The wizard asks whether you disposed of capital assets “including crypto asset(s)” and whether you derived business, trade or professional income “including crypto asset(s)”, the latter feeding the container SARS labels Local Business Trade and Professional Income (Including Crypto Assets(s)). In the capital gains container the Main Asset Type source codes are 6520 for gains and 6521 for losses on crypto assets.
Is there new SARS guidance coming?
SARS published a Draft Guide to the Taxation of Crypto Assets on 1 July 2026 with comment due by 31 August 2026. It addresses swaps, arbitrage, payment in crypto, employment benefits, donations, record-keeping and return disclosure. It does not deal with VAT, and SARS states it is not an “official publication” as defined in the Tax Administration Act.
Do You Need Help With a SARS Voluntary Disclosure Programme Application?
If you have years of exchange activity that never reached an ITR12, the sequence matters more than the arithmetic, and the sequence is decided before anything is filed. We rebuild the histories, quantify the exposure per year, and prepare the VDP01 with the schedules that support it. Book a call to review your own facts, or email info@chconsulting.co.za with questions about your situation.
