Tag: exchange control

Cryptocurrency traders in South Africa are focused on understanding the tax implications of their transactions. These transactions are relative to the Income Tax Act. This has been challenging, as SARS has only stated that "the normal rules apply." They have not provided authoritative guidance on cryptocurrency-related transactions or when profits are considered capital or income.

For most people, one of the most fascinating aspects of cryptocurrency is the ability to bypass traditional financial intermediaries, such as banks, and directly control their funds. But what many people may not know is that cross-border crypto asset transactions require prior exchange control permission.

In the fast-paced world of startups, particularly those breaking new ground, the excitement of innovation and market disruption often takes centre stage. However, amidst this buzz, it's crucial for startups to prioritise their foundational business structures from the outset.

There are many challenges for treasuries across the world, in any market, but the developing world has an opportunity for a head start in the switch to digital. This is borne out by the fact that the adoption of best practice treasury management tools, technology and integrated enterprise resource planning (ERP) systems that feed off data points all along the ERP value chain, are entirely within the grasp of corporate treasuries.

When it comes to forex in a South African context, how can South African businesses and High-Net-Worth Individuals (HNWI) ensure that they are receiving the best service possible and secure the best rates?

The South African Reserve Bank (SARB) recently announced their intention to declare cryptocurrency as a financial product, which is in line with current worldwide trends as well as the Financial Sector Conduct Authority (FSCA) which published a draft declaration of crypto assets as financial products in 2020.

Twenty months ago, the South African Reserve Bank (SARB) published commentary unintentionally implying that institutional investors – the custodians of retirement funds – were suddenly allowed to place all their assets offshore, from a prior limit of 30%.

The transition from the old emigration regime to the current regime - ceasing of tax residency, came with some relief. However, there were some silent changes that went unnoticed. The most notable change has been the requirement of a SARS Tax Compliance Status (TCS PIN) for every capital transfer a Non-Resident/Non-Tax Resident makes to offshore.

South Africa’s exchange control regime has relaxed considerably over the last few years, but the most recent amendments have created widespread confusion around the definition of non-residency for exchange control purposes. In particular: When is a person non-resident for exchange control in South Africa? How do they cease to be resident for exchange control purposes? And what does all this mean?

In light of recent developments on the sides of both the South Africa Revenue Service (SARS) and the South African Reserve Bank (SARB), the regulatory burden for the cross-border flow of funds, resulting from transactions concluded between South African residents and foreign parties, has been significantly eased.