How to Report NFT Profit in South Africa: A Step-by-Step Tax Guide (2024)

Understanding NFT Taxation in South Africa

The South African Revenue Service (SARS) classifies NFTs as intangible assets, meaning profits from their sale are subject to Capital Gains Tax (CGT) or income tax depending on your trading activity:

• Occasional sellers: Pay CGT (up to 18% for individuals)
• Frequent traders: Profits treated as income (taxed at 18%-45%)

Step-by-Step Guide to Reporting NFT Profits

1. Calculate Gains/Losses: (Selling Price – Purchase Price – Gas Fees – Platform Fees)
2. Determine Tax Type: CGT for personal assets vs. income tax for business activities
3. Complete SARS Forms:
   • ITR12 (Income Tax Return)
   • IT3(c) for capital gains
4. Submit by Deadline: 31 October for manual filing

Required Documentation

• Blockchain transaction records
• Platform statements (OpenSea, Rarible, etc.)
• Proof of wallet ownership
• Gas fee receipts

4 Common Reporting Mistakes to Avoid

1. Not declaring overseas platform profits
2. Mixing personal/business wallets
3. Forgetting airdropped NFTs
4. Ignoring losses (offset up to R40,000 annually)

NFT Tax FAQ

Q: What if I traded NFTs anonymously?
A: SARS requires disclosure regardless of wallet privacy features.

Q: Are NFT staking rewards taxable?
A: Yes – treated as income at market value when received.

Q: How are DAO earnings handled?
A: Taxed as either dividends or business income depending on DAO structure.

Q: Penalties for late filing?
A: 10% penalty + 20% understatement penalty for undisclosed income.