Taxation authorities in Singapore to end GST taxation on cryptocurrencies

The Inland Revenue Authority of Singapore (IRAS) published an e-Tax draft guide for the “Digital Payment Tokens,” seeking to exempt the GST liabilities for any entity dealing with such digital assets that function or are aimed to function as a medium of exchange.

If the draft guide can pass the legislation, then starting from Jan. 1, 2020, the exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST and the use of digital payment tokens as payment for goods or services will not give rise to a supply of those tokens.

Examples of digital payment tokens are Bitcoin, Ethereum, Litecoin, Dash, Monero, Ripple and Zcash, the IRAS added in the proposal. Notably, the agency specified that stablecoins, a type of cryptocurrency designed to have a value pegged to a fiat currency, may not qualify to be GST-exempted.

The IRAS stated the e-Tax is still in its draft form and the Ministry of Finance will be holding a public consultation from now until July 26 on the “legislative amendments for digital payment tokens.”