On or about 5 July 2019, the Inland Revenue Authority of Singapore (IRAS) is inviting public feedback on the draft IRAS GST: Digital Payment Tokens e-Tax Guide.
This draft guide explains the GST treatment for transactions involving virtual currencies/cryptocurrencies that function or are intended to function as medium of exchange (referred to as digital payment tokens).
Under the current rules, the supply of digital payment tokens is treated as a taxable supply of services. Therefore, the sale, issue or transfer of such tokens for consideration by a GST-registered business is subject to GST. When the tokens are used as payment for the purchase of goods or services, a barter trade resulting in two separate supplies arises — a taxable supply of the tokens and a supply of the goods or services.
From 1 January 2020, supplies of digital payment tokens will no longer be subject to GST. Specifically:
- The use of digital payment tokens as payment for goods or services will not give rise to a taxable supply of the tokens and a supply of the goods or services, and
- The exchange of digital payment tokens for fiat currency or other digital payment tokens will be exempt from GST.
The IRAS is seeking feedback on this change of GST treatment, from businesses dealing in digital payment tokens. The consultation period is from 5 July 2019 to 26 July 2019.
For further information, please visit the IRAS website.
Source: IRAS website, 5 July 2019