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Singapore's tax office proposes to terminate GST on Cryptocurrencies

The taxation of the Asian Government proposes to remove goods and services tax (GST) from cryptocurrency transactions that function or should act as a swap agent.

On Friday, the Singapore Inland Revenue Authority (IRAS) published an e-tax draft guide to address what it calls "Digital Payment Tokens" seeking to exempt any entity dealing with such GST digital assets. commitments.

If the draft guide passes through the legislation, from January 1, 2020, the following changes will come into force to "better reflect the characteristics of digital payment signs:"

(i) The use of digital payment documents as payment for goods or services will not give rise to the supply of these tokens [1

9659002] (ii) Exchanges of digital payment tables for fiat currency or other digital payment signs are exempt from GST.

IRAS said the e-tax guide is still in the draft and that the Ministry of Finance will hold a public hearing from now on 26 July on "legislative amendments to digital payment tables".

The draft guide also contains detailed parameters on how digital payment documents are defined, which must have all the listed characteristics below:

a) It is expressed as a unit

b) It is fungible

c ) It is not denominated in any currency and is not attached by the issuer to any currency

d) It can be transferred, stored or traded electronically

e) It is or must be a swap house accepted by the public or part of the public without significant restrictions on their use. [19659006] "Examples of digital payment tokens are Bitcoin, Ethereum, Litecoin, Dash, Monero, Ripple and Zcash," added the IRAS in the proposal.

In particular, the agency stated that stablecoins, a type of crypto rivalry intended to have a value attached to a fiat currency, cannot qualify for being the GST exempt.

"Any digital token that is denominated in any fiat currency or with a value associated with a fiat currency cannot be considered a digital payment sign," IRAS said in the draft. "For example, a digital token associated with US dollars will not be considered a digital payment mark."

IRAS said efforts to complete GST commitments on cryptographic baskets follow worldwide development and growth in the space that has led various jurisdictions to revise their position. "Similarly, IRAS has gone through its GST position to keep abreast of these developments," the agency said.

Under the current framework, the supply of digital payment coupons is still seen as a taxable supply of services.

"Therefore, the sale, issue or transfer of such tokens for consideration of a GST registered company is subject to GST. When tokens are used as payment for the purchase of goods or services, a barter arises resulting in two separate supplies – a taxable person supply of tokens and supply of goods or services, IRAS said in the draft. [19659002] In October 2017, legislators in Australia adopted a piece of legislation to complete what is called double taxation, the exception of liability for payment of goods and services tax ( GST) when purchasing crypto competition

Singapore image via Shutterstock

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