Singaporean tax authorities issues updated crypto tax guidelines
|- The Internal Revenue Authority of Singapore has issued revised crypto tax policies in an e-tax guide.
- Tax authorities have mandated payment tokens like BTC to be treated as intangible property instead of legal tender
- Crypto obtained from airdrops and hard forks will not be taxed, under certain conditions.
The Internal Revenue Authority of Singapore (IRAS) has issued revised policies concerning the taxation of digital tokens and ICOs in a newly published e-tax guide. According to the guide, three categories of crypto fall under the purview of the IRAS’ taxation policy. These include payment tokens used to buy goods and services, utility tokens (which serve as a representation of rights to food and services) and security tokens.
The IRAS noted that the guidelines aim to clarify issues about income tax levied on cryptocurrencies. An excerpt from the e-tax guide reads:
The general income tax treatment for digital tokens is to be determined based on the nature and use of digital tokens, rather than the label that the tokens take. We recognize that the technology for digital tokens is constantly evolving and the nature of digital tokens may vary over time.
Concerning payment tokens like Bitcoin, the tax authority has mandated crypto to be treated as intangible property rather than legal tender. This means that the tax levied on transactions involving crypto like BTC will fall on the goods or services being purchased and not the currency itself.
Additionally, security tokens come under the same flexible tax laws regulating other non-crypto securities under Asia’s tax haven. However, the e-tax guide explains that ICOs issuing payment tokens and utility tokens will be taxed differently. The tax guide further clarified that the IRAS will not levy income tax on airdropped crypto as long as the recipient is not required to pay any transaction fees. Furthermore, payment tokens and crypto obtained from a blockchain’s hard fork will not be taxed as well.
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