The Inland Revenue Authority of Singapore (IRAS) has published a draft of some guidelines explaining the operation of good and service tax (GST) involving transactions made using crypto.
The draft contains a reference to digital token payments and refers to Bitcoin, Ethereum, Litecoin, Dash, Monero, Ripple and Zcash. These payment cryptocurrencies will no longer be taxed from January 1st, 2020.
“Global development and growth in the use of cryptocurrencies have caused tax jurisdictions to review their GST position on cryptocurrencies transactions. Similarly, IRAS has reviewed its GST position to keep up to date with these developments. In particular, IRAS recognises that taxing cryptocurrencies which function or are intended to function as medium of exchange (that is, digital payment tokens) results in two tax points — once on the purchase of the cryptocurrency and again on its use as payment for other goods and services subject to GST. To better reflect the characteristics of digital payment tokens, with effect from 1 Jan 2020, the supply of such tokens will no longer be subject to GST. The change in GST treatment does not represent IRAS’ endorsement of cryptocurrency investments.”
The document also explains how these will behave with regard to the use of crypto payment methods for the payment of taxes on both the buyer and seller sides:
“If you are paying digital payment tokens in return for goods and services, you need not account for output tax.If you are receiving digital payment tokens in return for your supply of goods or services and you are GST-registered, you would have to account for output tax on your supply of goods or services (unless the supply is an exempt or a zero-rated supply).”
However, in the definition of digital token payments, stablecoins or cryptocurrencies pegged to other assets are not specifically mentioned.
The country, therefore, seems to be very favourable to crypto and their use as a payment method. Is it possible that the fact that it has lost its first place in the world in terms of a better standard of living to Switzerland is “forcing” the country to rethink its modus operandi?