South Africa is set to implement major new financial and crypto-asset reporting obligations from 1 March 2026, with the adoption of the OECD Crypto-Asset Reporting Framework (CARF) and a revised Common Reporting Standard (CRS).
The change represents “a significant advancement in compliance with international tax standards, and the eradication of crypto-tax evasion”, says Jashwin Baijoo, partner and head of strategic engagement and compliance at Tax Consulting SA. These changes will affect financial institutions, crypto-asset service providers (CASPs), and account holders, requiring expanded disclosure, due diligence, and record-keeping.
Baijoo explains that the implementation of CARF and the updated CRS aims to enable an automatic exchange of tax-related information for both traditional financial accounts and crypto assets.
Crypto-Asset Reporting Framework
CARF is codified in Notice R.6887 of Government Gazette No. 53735, dated 28 November 2025.
The framework places reporting obligations on what are defined as reporting CASPs, including exchanges, custodians, and trading platforms operating in South Africa or serving persons with a South African tax nexus.
Reporting CASPs – including businesses or individuals who offer crypto exchange services, custody, or trading platforms – must validate user tax residency through self-certifications and retain documentation for a minimum of five years.
According to Baijoo, CASPs must:
- Identify individuals and entities subject to the reporting requirements.
- Promote tax transparency on reportable transactions.
- Implement rigorous due diligence procedures to identify crypto-asset users and controlling persons across jurisdictions.
- Validate users’ tax residency via self-certifications.
- Retain all documentation, including user Identity Documents, certifications, and transaction records, for at least five years.
Non-compliance may lead to suspension of customer relationships and potential penalties under tax law.
Updated Common Reporting Standard
The revised CRS is codified in Notice R.6886 in the same Gazette.
Baijoo highlights that from March 2026, South African financial institutions – including banks and investment entities – must comply with enhanced due diligence and expanded reporting obligations.
These revisions are intended to bring within scope certain electronic money products and Central Bank Digital Currencies, plus possibly other financial intermediaries and asset classes.
Under the revised CRS, institutions must identify “reportable persons” and report account data, including balances, gross interest, dividends, and other standard financial-account information.
Baijoo further suggests that this broader framework complements CARF – meaning that both traditional financial accounts and crypto-asset holdings/transfers may now be subject to automatic exchanges of information.
Enforcement and regulatory co-ordination
Baijoo underscores that CARF and CRS are mandatory – not optional or advisory. He notes that South Africa participates in multilateral agreements for information exchange, which significantly increases the risk of exposure for unreported accounts.
In particular, he points to a co-ordinated enforcement stance between the South African Reserve Bank and the South African Revenue Service under existing working groups. As a result, crypto-asset taxation and enforcement of historic non-declaration (including offshore assets) receive priority.
Given this broader scope, Baijoo warns that taxpayers should no longer rely on the assumption that crypto gains are outside SARS’s reach – be they locally or offshore.
In addition to tax compliance, there are exchange control considerations: licensed authorised dealers (commercial banks) handle foreign exchange transactions under the SARB’s mandate. For complex or large transactions, matters may be referred to specialist SARB teams. Therefore, compliance will likely require co-ordination between tax, exchange control, and financial services regulation.
Implications for crypto traders and investors
According to Baijoo, the era when crypto traders could assume their assets were beyond SARS’s purview is over. He argues that crypto-related activities – even if held “on-platform” and not realised into fiat – may carry stringent reporting requirements and possibly tax liabilities.
“Crypto-related activities, even though on-platform, and perhaps not realised for fiat gain, do carry with them stringent reporting requirements, including declaration and payment of taxes due on the benefits derived thereon.”
For traders and investors, the practical implication is clear: maintain full and accurate records of all crypto transactions (dates, amounts, counterparties, values, wallet addresses, etc.), tax-residency status, and any relevant documentation tied to the user or controlling person.
Baijoo recommends seeking professional tax advice rather than attempting to self-remedy any past non-declaration issues.
A path for remediation: voluntary disclosure
For taxpayers concerned about past undeclared crypto-asset gains or holdings, Baijoo suggests that SARS’s Voluntary Disclosure Programme (VDP) may provide a viable route to regularise their tax affairs.
Through the VDP, taxpayers could mitigate potential penalties and reduce the risk of criminal prosecution, provided disclosures are made before formal investigations.
Transition timeline
Although CARF and CRS regulations take effect on 1 March 2026, Baijoo notes that many financial institutions and CASPs will need to update their systems, KYC/AML processes, and reporting pipelines in advance.
Given the international exchange agreements and existing co-operation between SARS and SARB, individuals and entities with undeclared crypto holdings or offshore accounts may face increasing exposure even before 2026.
Disclaimer: The information in this article is a general guide and should not be used as a substitute for obtaining professional tax advice.
