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The Inland Revenue Authority of Singapore (IRAS) recently published a new guide with regards to the Goods and Services Tax (GST) on the matter of crypto payments. Referring to crypto coins as “digital payment tokens,” the IRAS is basically saying that it wants to change the categorization of the new currencies. By doing so, it would then become exempt from GST, which could go a long way towards growing the port nation’s crypto industry even more.
The details with regards to what this new tax exemption could mean are provided in the new draft guide that the IRAS has made available. In it, the tax authority laid out exactly what it plans to do with regards to crypto payments starting on Jan. 1, 2020.
“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 reads.
In an attempt to better classify crypto payments as they are meant to be, the IRAS decided to change its classification. A lot of this is due to how the use of crypto coins for payment does not exactly lead to more crypto coins popping up out of nowhere.
“The use of digital payment tokens as payment for goods or services will not give rise to a supply of those tokens,” the amended guide reads. “The exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST.”
This is a timely development, as well, because Singapore’s crypto scene is absolutely booming. In fact, one of the largest Ethereum wallets is already planning to move to the port nation, South China Mornin Post reports.
