The Singaporean tax agency is initiating (Goods and Services Tax) GST removal from crypto that works as a medium of exchange. The Inland Revenue Authority of Singapore (IRAS) proposed this initiative in an e-tax guide.
In case the proposal gets accepted then it will come into action on January 1st, 2020. It will bring some certain changes in the current status of digital payment tokens. Firstly, the use of these tokens in exchange for goods and services will not give rise to the supply of those tokens. Secondly, the exchange of this tokens for fiat or other digital payments tokens will free from GST.
IRAS has also set some parameters to define the digital payment tokens. Tokens like bitcoin, ether, litecoin, dash, monero, XRP and zcash are meeting the definition of a digital payment token. Whereas, crypto assets that are pegged to a fiat currency will not qualify the GST exempt.
The tax agency is also seeking consultation from crypto-based businesses till 26th July. For now, the supply of these tokens is still liable to the taxable supply of services.