Singapore is a global leader in the business of finances and in line with that leadership has given guidance on how it intendes to treat Bitcoin for tax purposes. Singapore is known for it’s lean tax environment, having a progressive tax system where liabilities range from 0% to 20% of ones income.
Singapore Bitcoin brokrages have received news from the Inland Revenue Authority of Singapore (IRAS) on how to handle capital gains , earnings, and GST (aka VAT, or sales tax) on bitcoin exchanges and bitcoin related sales. Exchange Coin Republis has said…
“The guidance which IRAS laid out is rational and well thought out. As a business owner, I can clearly account for my earnings on Bitcoin trades for my clients and my own positions and pay the proper taxes,” said David Moskowitz, Coin Republic’s founder.
Singapore has retrenched from their initial cautionary position on Bitcoin and know is taking a more hands off approach to spur Bitcoin entrepreneurship.
Some of the key points of the IRAS’s guidance are:
- Companies will be taxed on income based on bitcoin sales, as though bitcoins were products.
- When used as an investment Bitcoins are treated as capital gains (Singapore has for non-property investments).
- GST rules could vary depending on the level of service an exchange provides (see below).
- When accepted as payment for goods and services, bitcoins are counted as barter exchange. This includes digital products like music, but not in-game virtual products unless they are exchanged for money or other goods in the real world.