Revamp of GST policy on virtual currencies to bolster Singapore’s competitiveness as a global blockchain hub

The Association of Crypto-Currency Enterprises and Start-ups, Singapore (ACCESS) welcomes the proposed changes to the Goods and Services Tax (GST) Act in relation to Digital Payment Tokens (DPT).

In the draft e-Tax Guide released by the Inland Revenue Authority of Singapore (IRAS) on 5 July 2019, with effect from 1 January 2020, the exchange of virtual currencies with DPT characteristics for fiat currency or such virtual currencies will be exempt from GST, and the use of such virtual currencies as payment for goods and services will no longer be subject to GST.

Mr Anson Zeall, Chairman, ACCESS, comments:

“The tax regime is an important consideration for global fintech and blockchain companies in deciding where to operate their businesses, as well as where and how to raise funds.

IRAS’ proposed update to the tax code will eliminate many existing business hurdles and costs – a significant step forward in strengthening Singapore’s competitiveness as a global blockchain hub. It is poised to attract more global blockchain companies to make Singapore their home. In the recent years, notable global blockchain companies in the likes of Enjin, Bitmain and Crypto.com have expanded their operations to Singapore. With the growing confidence in Singapore as a global fintech leader, we can expect more to follow suit.”

Ms Zann Kwan, Treasurer, ACCESS, comments:

“Fintech companies looking to raise funds in Singapore will welcome the proposed changes exempting proceeds from Initial Coin Offering (ICO) from GST as this will be one of the friendliest tax regulations in the world for non-securitised token offerings, if they have the characteristics of DPTs.

The proposed changes are timely, coinciding with the introduction of GST on imported services from 1 January 2020, announced in the Budget 2018. Once the proposed tax changes take effect from 1 January 2020, Singapore will cement its standing as a pioneer amongst the key financial hubs in establishing friendly and well-defined GST regulations for non-securitised tokens. Clearly, it is now taking the lead in the cryptocurrency, blockchain and digital payment ecosystem, and carving out a solid reputation as an innovation hub.”

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