The Inland Revenue Authority of Singapore (IRAS) wants to exempt bitcoin and other crypto coins from taxes on goods and services (VAT) from 1 January 2020. This is evident from a draft version of the new tax guide (download as PDF). You can see the IRAS as the Singapore tax authorities.
Bitcoin and cryptocurrencys are currently still being taxed
In Singapore you currently pay a seven percent tax on goods and services (Goods and Services Tax). This tax is similar to Dutch VAT. The Singaporean tax authorities now want to change that, and abolish this tax.
Before that happens, the Singapore government must accept the proposal. Did that succeed? Then from January 1, 2020, residents of Singapore no longer have to pay VAT on bitcoin and other crypto coins. This applies, for example, to exchanging cryptocurrencys for fiat and vice versa, but also for purchasing goods with cryptocurrency.
In the proposal, IRAS mentions various crypto coins that serve as means of exchange: bitcoin (btc), ethereum (eth), litecoin (ltc), dash (dash), ripple (xrp) and zcash (zec). Remarkably, stablecoins such as tether (usdt) are not mentioned. It is not known what the IRAS wants to do with it.
Miners continue to pay taxes
In the future, Singapore residents may therefore no longer have to pay taxes on cryptocurrency’s as a means of exchange. But they still have to pay taxes on crypto coins obtained from mining. A miner gets a reward in cryptocurrency for providing services. According to the IRAS, that is enough to pay taxes on goods and services.
Bitcoin and tax policy differs per government
Bitcoin and tax, how do governments actually deal with this? This varies from country to country; in the Netherlands, for example, you pay wealth tax on your bitcoin. And in Singapore you now pay taxes on goods and services, which might change in the future.
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