Singapore proposes a new law to end the Goods and Service Tax which is imposed on cryptocurrencies according to the Inland Revenue Authority of the country’s reports which we have in the coming altcoin news today.
According to the reports, under the existing rules, all of the crypto users are taxed twice when trying to use cryptocurrencies to pay for their goods and services. This is mainly because the IRAS treats such a transaction as a barter trade which results into separate cases of supply. Also, the Inland Revenue Authority is now looking for feedback of making the proposed change starting on January 1st, 2020. Per the explanation, the exemption from the GST will only apply for those cryptocurrencies that qualify as digital payment tokens. The Digital tokens such as those that represent ownership rights to property will be a subject to the previously mentioned tax.
In order to assist the taxpayers, the IRAS has already outlined the qualities of cryptocurrencies and crypto payment tokens which includes fungibility. Among the cryptocurrencies that are qualified to be digital payment, tokens are Ethereum, Dash, Monero, Bitcoin, and Zcash. An excerpt from the report explains:
‘’…a digital token pegged to US dollars will not qualify as a digital payment token but may instead fall under the list of financial services (such as derivatives)’’
As noted in some of the latest cryptocurrency news, some cryptocurrencies will miss out on this change. This includes Tether which is pegged to the US dollar. Facebook’s Libra which will be pegged to multiple currencies will also not qualify as a digital payment token according to IRAS’s definition. Singapore proposes that the goal of the bring the unfair treatment of cryptocurrencies to an end. The change is necessary because individuals or companies that supplied cryptocurrencies for their business or in the course of doing business, they have to pay GST. Also, they would also have to pay GST if they used cryptocurrencies in order to pay their services or goods.
The IRAS indicated that this move is aimed mainly to ensure Singapore is up to date with the major tech developments in the world. For example, two years ago Australia eliminated GST on users of cryptocurrencies which were buying or selling but also for those who used them to pay goods and services.
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