The Inland Revenue Authority of Singapore (IRAS) recently disclosed their plans to generate tax revenues from businesses involving cryptocurrencies.
The official tax authority published a document a week ago that neatly described the amalgamation of cryptocurrencies, like Bitcoin, into the existing income tax policies. At first, the IRAS excused virtual currencies to be brought under the category of ‘money’, ‘currency’, or ‘goods’. But now, instead, the new income tax law referred to cryptocurrencies as ‘services’, making then vulnerable to existing Goods and Services Tax (GST) taxes.
For instance, GST-registered businesses inside Singapore, which are involved in buying/selling goods or services using Bitcoin and other cryptocurrency, will be subjected to pay GST. Though, the tax will not be applicable on businesses operating outside the jurisdiction of Singapore.
Similarly, GST-registered businesses involved in selling/buying of virtual currencies will also be liable to pay income tax out of their profits. The tax will not be applicable if the sale is made to a person residing outside Singapore. GST-registered businesses include cryptocurrency exchanges, agents, and goods importers as well.
Singapore Continues to be Cryptocurrency Friendly
There would be no risk in saying that Singapore keeps a soft-spot for Bitcoin and likewise innovative cryptocurrencies. The country has shown no political or ideological backlash against cryptocurrencies, barring a few guidelines and regulations that were intended to tackle money laundering and terrorist financing risks.
While the current tax reforms might still irritate businesses with lower profits, we cannot deny that it will help Bitcoin gain some mainstream understanding in a country known for its pro-technology stance. #IMO
Image Credits: Singaporean Government.