In recent times Singapore has taken an action regarding cryptocurrency that they are going to reduce tax as to function as a medium of exchange for goods and services. So the user of cryptocurrency will get benefited by this taken initiative. In July 5, This news was published as a draft e-tax guide by the Inland Revenue Authority of Singapore.
If this proposed guideline will get accepted then it’s set to take effect on january 2020 and will accelerate the digital payment system. The document sets out the two proposed core changes to taxation rules in future as follows:
“The use of digital payment tokens as payment for goods or services will not give rise to a supply of those tokens; and (ii) The exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST.”
In its Hands out, the Inland Revenue Authority of Singapore includes bitcoin, ether, litecoin, dash, monero, XRP and zcash as cryptocurrencies that meet its definition of a digital payment token designed to function as a medium of exchange. Not only that but also The Inland Revenue Authority of Singapore specifically excludes fiat-pegged crypto assets — such as certain stablecoins — from its definition of a digital payment token, meaning they will continue to be taxed under GST after January 2020.
In a section devoted to cryptocurrency mining, the Inland Revenue Authority of Singapore proposes that in most cases the new rules will exempt token rewards generated by mining, noting that:
“There is generally no sufficiently close nexus between the service provided by the miner to the persons whose transactions are verified, and the mined tokens that the miner received from the blockchain ecosystem. The parties paying the mined tokens are also not identifiable.”
Basically , where “a miner performs services to an identifiable party or parties, in return for a consideration, this constitutes a taxable supply of services,” the document states. So The tax authority of Singapore seeks feedback from local entrepreneurs in the crypto sector on its proposed changes, which must be submitted before 26 July 2019.