Singapore to drop GST charges for cryptocurrency transactions.
July 9, 2019 6:49 am,
Singapore is considered as one of the fastest-growing economies across the globe. Being the free market economy that it is, Singapore has always been open to new technologies and changes. This case has been true especially in the case of cryptocurrency. It is one of the nations that has legalized cryptocurrency and gives it the status of ‘goods’. This has led to a lot of positive changes in the economy, and the people of Singapore have also been open to the change that had been brought upon them. Cryptocurrency can very well be used as a substitute for the legal tender or the fiat currency, and this usage has put cryptocurrencies such as Bitcoin under the GST. The latest change that is about to take place in the Singapore economy is the proposition of making cryptocurrency exempt from the Goods and Services Tax.
Goods and Services Tax
The Goods and Services Tax has a slightly different definition when we move across countries. It is because of the simple reason that the way the economy functions varies from one country to the other. When it comes to Singapore, the nation levies a tax for the import of goods and the supply of goods and services. When it comes to cryptocurrency, it is given the status of goods, and hence, is liable to pay the tax. When I say cryptocurrency, the emphasis is given to the very first of the cryptocurrency, the Bitcoin. The economy of Singapore is most familiar to Bitcoin than the rest of the cryptocurrencies. Since the legalization of Bitcoin and other altcoins in Singapore, the payment of GST has been mandatory.
Tax exemption to cryptocurrency
The Singapore government had decided to make a tax exemption for cryptocurrency and they are planning to officially roll out the bill by the beginning of 2020. The news was publicized by the Inland Revenue Authority of Singapore (IRAS). Presently, the transactions involving the digital tokens are considered as taxable supply of services, but this restriction is to be taken away very soon. The two main agendas or key highlights of the proposition are as below:
- The use of digital payment tokens as payment for goods or services will not give rise to a supply of those tokens.
- The exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST.
Apart from these two points, the IRAS has also made it clear that the exemption is not available to the stable coins, or the fiat pegged crypto assets. There has also been a reference and mention about the cryptocurrency miners and says that the new rules will indeed exempt token rewards that are generated through mining. This new set of rules will indeed make the cryptocurrency society even more active and also more people friendly.