The Singapore Tax Administration (IRAS) has published a guide in which it proposed to abolish VAT on operations for the exchange of cryptocurrencies for fiat funds. Now the changes must be approved at the legislative level.
Draft E-Tax Guide _GST_Digital Payment Tokens by BlockchainJournal on Scribd
The IRAS identified the following characteristics of digital payment tokens:
- interchangeable;
- not linked to existing currencies and not denominated in them;
- serve or are intended as a means of payment without any significant restrictions on use;
- expressed in units.
As examples of such tokens, the Office indicated Bitcoin, Ethereum, Litecoin, Monero, Zcash, and Ripple. It is noteworthy that stablebcoins do not fall into this category, but they can be considered in the context of the provision of financial services.
Note that in case of approval of the proposed changes, they will enter into force on January 1, 2020. In the meantime, the cryptocurrency business has time until July 26 to officially comment on the initiative.
In November 2018, the Monetary Authority of Singapore (MAS) presented a new regulatory framework for cryptocurrency payment service providers, involving licensing of such enterprises.
The MAS also established clear rules for all ICO participants: the organizer must obtain a license to provide services in the capital markets, consultants must obtain a license from a financial adviser, and exchanges must be checked by the department.
All three key participants in ICO campaigns are required to take measures to combat money laundering and the financing of terrorism (AML / CFT).
It is worth adding that the head of the division for financial technology and innovation MAS Damien Pang said earlier that the law on securities should not regulate any of the tokens known to the department.
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