The Government of Singapore suggested removing goods and services cryptocurrency taxation which operates as a means of exchange.
On July 5, the Inland Revenue Authority of Singapore issued a draft of e-Tax guidelines on digital currency payments aiming to eliminate goods and services taxes for all organizations that use crypto-assets.
In the event that the legislation is passed some changes will occur in order to take into consideration the functions and qualities of crypto coins. Firstly, payment with digital assets for goods and services won’t affect the supply of said assets.
On the other hand, exchanging crypto coins for traditional currencies or other crypto coins will be separated from goods and services tax. The earlier mentioned legislation will be set to work on January 1, 2020.
The Inland Revenue Authority of Singapore declared that the tax guidelines are still in development and, until July 26, The Ministry of Finance will carry a consultation discussing the new legislation on crypto tokens.
The new guidelines also display standards of crypto tokens. The parameters are that a crypto coin should be expressed as a unit, it should be fungible, it shouldn’t be linked to any currency or entity, transactions should take place electronically and the coins should be a means of exchange.
According to the Inland Revenue Authority of Singapore, some examples of crypto coins are Bitcoin, Dash, Ripple, Ethereum and Monero.
Stablecoins, crypto-assets that are connected to a stable asset or basket of assets, will be taxed as goods and services.
“Any cryptocurrency whose value is connected to a fiat currency or another cryptocurrency such as Tether, a crypto coin pegged to the United States dollar won’t be characterized in the mentioned category.” The agency stated.
“Hence, the use of these crypto tokens for consideration by a goods and services tax-registered organization will still be objected to goods and services tax.”
Two years earlier, Australia also passed similar regulations to eliminate double taxation of digital payment tokens.