- A new draft bill posits that crypto transactions in Singapore could be exempted from GST
- This is being done to better display the monetary nature of digital currency transactions
- The IRAS plans to implement several new measures from January 1, 2020
Singapore’s Inland Revenue Authority (IRAS) could soon exempt digital currencies from Goods and Services Tax (GST) per a new regulatory draft, The News Asia reports, July 7, 2019.
Tax Exemptions for Cryptocurrencies
Cryptocurrencies and taxes have for long been one of the most challenging duos. Taxes in itself are a tricky phenomenon to wrap one’s head around, and adding digital currencies to the mix further complicates the already labyrinthine idea.
However, according to a report by The News Asia, the Inland Revenue Authority of Singapore (IRAS) could soon change the tax categorization of digital currencies. Per the report, the country’s tax watchdog refers to crypto coins as “digital tokens,” hinting that it could soon make them exempted from GST.
Details on the IRAS’ taxation stance towards digital currencies were recently published in a new publicly available draft guide. In the guide, the regulatory body notes several propositions that it wants to introduce from January 1, 2020.
The draft reads in part:
“Under the current rules, the supply of digital payment tokens is treated as a taxable supply of services. Therefore, the sale, issue or transfer of such tokens for consideration by a GST-registered business is subject to GST. When the tokens are used as payment for the purchase of goods or services, a barter trade resulting in two separate supplies arises — a taxable supply of the tokens and a supply of the goods or services.”
The IRAS is reportedly mulling changing the tax classification of cryptocurrencies to better classify the nature of crypto payments as they are supposed to be.
The updated guide reads:
“The use of digital payment tokens as payment for goods or services will not give rise to a supply of those tokens.”
“The exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST.”
Tax and Cryptocurrencies
As noted earlier, the taxation of crypto transactions is a relatively novel phenomenon. A number of countries around the world have taken measures to ensure proper taxation of crypto transactions and tighten the regulatory noose around the nefarious tax evaders.
Blockchain Reporter informed its audience on June 6, 2019, how Japan is tightening its stance towards crypto tax evaders. According to a report, in 2018, Japan witnessed a massive surge in tax evasion from crypto related profits – as much as $93 million.