The Singaporean government’s taxation agency is proposing to remove goods and services tax (GST) from cryptocurrency transactions that function or are aimed to function as a medium of exchange.

The Inland Revenue Authority of Singapore (IRAS) published last Friday an e-Tax draft guide for treatment on what it calls the “Digital Payment Tokens,” seeking to exempt any entity dealing with such digital assets from GST liabilities.

If the draft guide passes into legislation, starting from Jan. 1, 2020, the following changes will take effect to “better reflect the characteristics of digital payment tokens:”

The IRAS said the e-Tax guide is still in its draft form and that the Ministry of Finance will be holding a public consultation from now until July 26 on the “legislative amendments for digital payment tokens.”



(Picture sourced from: pexels.com)

The draft guide also sets out detailed parameters on how digital payment tokens are defined, which should have all of the listed characteristics below:

a) It is expressed as a unit

b) It is fungible

c) It is not denominated in any currency, and is not pegged by its issuer to any currency

d) It can be transferred, stored or traded electronically

e) It is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, without any substantial restrictions on its use as consideration.

“Examples of digital payment tokens are Bitcoin, Ethereum, Litecoin, Dash, Monero, Ripple and Zcash,” the IRAS added in the proposal.

Notably, the agency specified that stablecoins, a type of cryptocurrency designed to have a value pegged to a fiat currency, may not qualify to be GST exempt.

“Any digital token that is denominated in any fiat currency or with a value pegged to any fiat currency will not qualify as a digital payment token,” the IRAS said in the draft. “For example, a digital token pegged to US dollars will not qualify as a digital payment token.”

Article sourced from internet.