The Inland Revenue Authority of Singapore (IRAS) plans to suspend the application of the Goods and Services Tax (GST) to transactions in which cryptos are used as a means of exchange.
The regulator published last Friday a draft tax bill in which it proposes a new regulation for digital payment tokens. If the draft is approved, it will come into force on January 2020. From that moment:
- The use of digital payment tokens as payment for goods or services will not give rise to a supply of those tokens.
- The exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST.
This new regulation that seeks to regulate cryptocurrencies is still being developed and the country's Ministry of Finance will hold a public consultation until 26 July.
In addition, the document also includes a clear definition of what should considered as a payment token. According to it, this type of tokens "are expressed as a unit, are fungible, are not denominated in any currency and are not linked by their issuer to any currency, can be transferred, stored or negotiated electronically, are, or claim to be, a means of exchange accepted by the public, or a section of the public, without any substantial restriction on their use as consideration.
In November 2018, the Monetary Authority of Singapore (MAS) introduced a regulatory framework for cryptocurrency payment service providers, establishing the requirement of obtaining the corresponding license to be able to operate as such.
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