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Singapore Plans To Exempt GST on Cryptocurrencies: A Step Towards Making A Better Economy

Singapore one of the most favored nations for cryptocurrencies is stepping ahead and working on the development of new rules and regulations to make the country more crypto friendly towards its adoption.

In an recent update from the IRAS– The Inland Revenue Authority of Singapore which is a statutory board of the Singapore Government falls under the Ministry of Finance of the Singapore government in charge of tax collection released an e-Tax Guide (Draft) named “GST: Digital Payment Tokens” on July 5th and now in the process of seeking feedback on the new proposal from business dealing with digital tokens.

The draft reads that in the prevailing rule according to which the supply of digital payment tokens is treated as a taxable supply of services and is subject to Goods and Services Tax (GST) would be replaced with another proposed rule for future the sale, issue or transfer of cryptocurrencies.

The draft also mentions the reason for the changes- It says that “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 step is taken in order to change the categorization of the new currencies and to clear their classification towards the development of crypto payment structure. IRAS offered two crucial changes that can revamp the whole taxation arrangement in Singapore:

“i)    The use of digital payment tokens as payment for goods or services will not give rise to a supply of those tokens; and

ii) The exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST. Therefore, the supply of such tokens, being an exempt supply, would not apply in the annual taxable turnover for the determination of the liability for GST registration.”

  As per the displayed information, the proposed rule is expected to take place from January 1, 2020. Further, the Ministry of Finance (MOF) would be organizing a Public Consultation on the legislative amendments for digital payment tokens from 5 Jul to 26 Jul 2019. The MOF has invited people to give comments and present their viewpoints on the same document which is available on www.mof.gov.sg.

Singapore by its endeavors to make a crypto sociable nation is growing fast. Due to this, there are various crypto focused establishments moving their base regions where the regulations are not supportive or completely hostile to Singapore. Recently, the leading news publication South China Morning Post published about a Chinese start-up imToken- an Etherum wallet service provider which is moving its global headquarters to Singapore in an attempt of expanding its global reach.

As per the information,  Ethereum blockchain based imToken is already having over 4 million users and in an attempt of making around 10 million users by the end of the year, the company is enlarging its operations in a crypto responsive country where the rules and regulations are robust for future growth.

Tags: Cryptocurrency Tax Regulations, Singapore, IRAS, imToken,Ethereum, Governemnt, GST Singapore, Bitcoin Tax Regulations, Ministry of Finance (MOF)