Singapore may abolish tax on cryptocurrencies.
|- Singapore's tax authority proposes to end GST on cryptocurrencies.
- The law may take effect as early as the next year.
The Inland Revenue Authority of Singapore (IRAS) published guidance where it proposed to ditch goods and services tax on crypto to fiat exchange operations. Now the changes should be adopted by the legislators.
Meanwhile, IRAS defined the key features of digital payment tokens:
It is expressed as a unit. It is fungible. It is not denominated in fiat currency and is not pegged to any currency. It can be transferred, stored or traded electronically. It is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, without any substantial restrictions on its use as consideration.
The authority listed Bitcoin, Ethereum, Litecoin, Monero, Zcash and Ripple as examples of such tokens. Notably, stablecoins are not covered by the proposed definition as they can be ref=garded as financial instruments.
"Any digital token that is denominated in any fiat currency or with a value pegged to any fiat currency will not qualify as a digital payment token. For example, a digital token pegged to US dollars will not qualify as a digital payment token," the IRAS said in the draft.
It is worth noting that the proposals will take effect on January 1, 2020, provided that they are approved. Currently, the authority has launched the period of consultations; thus the companies and all interested parties can comment on the proposal until July 26.
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