Singapore Keen To Remove Goods And Services Tax On Crypto Payments

By Sumedha Bose

Some particularly pleasant news for those looking to engage in crypto trading in Singapore has come our way. It seems as if the Inland Revenue Authority of Singapore (IRAS) wishes to do away with Goods and Services Tax (GST) on cryptocurrency payments.

To that end, the IRAS has recently compiled a draft guide related to cryptocurrency tax in the country. The e-Tax Guide though currently in a draft form, suggests that crypto payments won’t be levied with GST taxes in the country.

The bill has been introduced and is slated to be passed soon, and shall take effect from 1 January 2020, thereby removing GST from digital payment tokens once and for al. The bill states:

“Under the current rules, the supply of digital payment tokens is treated as a taxable supply of services. Therefore, the sale, issue or transfer of such tokens for consideration by a GST-registered business is subject to GST. 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 draft has been carefully written to provide greater clarity on the taxation policies on crypto payments. It reads:

“The use of digital payment tokens as payment for goods or services will no longer give rise to a supply of those tokens. That is, if you use digital payment tokens to pay for the purchase of goods or services, you need not account for GST on the use.”

Business in Singapore will thrive if this bill is passed and the GST tax is removed. More and more companies shall then decide to actively trade in cryptocurrencies, which in turn will give the market the requisite boost that it needs.