Singapore Revenue Service Proposes to Cancel Cryptocurrency Taxation
The Inland Revenue Authority of Singapore (IRAS) has introduced a new crypto taxation bill. The draft was published on Friday, July 5, on the agency's official website.
According to the document, IRAS is proposing to exempt crypto transactions from the Goods and Services Tax (GST), known in other countries as the value-added tax (VAT). In case the draft is approved, the rules will be applied since January 2020.
Prior to the new proposal, the use of cryptocurrencies as a medium of exchange was treated as barter, consisting of two separate supplies: supply of tokens and supply of goods and services. Now, the agency proposes that the use of digital tokens as payment for goods or services “will not give rise to a supply of those tokens.”
The paper also provides a definition of a token, mentioning Bitcoin, Ethereum, Litecoin, Dash, Monero, XRP and Zcash as digital currencies that meet its definition and therefore can be used as a medium of exchange. However, stable cryptocurrencies (stablecoins) are not on the list.
In June, Singapore’s central bank, the Monetary Authority of Singapore (MAS), had a discussion with Facebook over its highly anticipated cryptocurrency Libra. The bank acknowledged the benefits of the digital currency but stated that Facebook must reveal more details about how it will work.
The MAS has also started regulating the work of crypto payment services in the country in late 2018. A bill was introduced to protect consumer funds, combat terrorism financing, and bolster cybersecurity.