Singapore’s taxation agency, the Inland Revenue Authority of Singapore (IRAS), is proposing the removal of goods and services tax (GST) from cryptocurrency transactions that function or are intended to function as a medium of exchange.
As reported by CoinDesk, the IRAS recently published an e-Tax draft guide for treatment on what it calls “digital payment tokens,” with the aim of exempting from GST liabilities any entity dealing with such digital assets.
Should the draft guide pass into legislation, the changes will take effect starting from January 1, 2020. They further stipulate that the use of digital payment tokens as payment for goods or services “will not give rise to a supply of those tokens.”
The IRAS noted that the e-Tax guide is currently still in its draft form, with the Ministry of Finance holding a public consultation on legislative amendments for digital payment tokens, set to conclude on July 26. Additionally, the draft guide sets out detailed parameters on how digital payment tokens are defined.
In the proposal, the IRAS listed Bitcoin, Ethereum Litecoin, Dash, Monero, Ripple and Zcash as examples of digital payment tokens. The agency also specified that stablecoins may not qualify for GST exemption.
According to the IRAS, the effort to end GST liabilities on crypto follows worldwide development and growth in the space that has in turn led various jurisdictions to review their stances.
The agency contextualized its position as keeping pace with these latest developments, as the supply of digital payment tokens is still viewed as a taxable supply of services under the current framework.
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