On July 8th, according to foreign media reports, the Singapore government's tax agency plans to terminate the Goods and Services Tax (GST) (or Value Added Tax (VAT) on cryptocurrency transactions as a medium of exchange.
Last Friday, the Singapore Revenue Agency (IRAS) published an electronic tax draft to deal with so-called “digital payment tokens” designed to exempt GST obligations of any entity dealing with such digital asset transactions.
According to IRAS, Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dash, XMR, Zcash (ZEC) and XRP are examples of digital payment tokens.
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It is reported that if the draft passes legislation, it will take effect on January 1, 2020. Currently, IRAS is seeking advice from the cryptocurrency business unit, and they need to respond by July 26.
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According to the definition given by IRAS, digital payment tokens need to have the following characteristics:
(a) expressed in units; (b) interchangeable; (c) not in any currency, nor is the issuer linked to any currency; (d) may be transferred, stored or traded electronically; ) accepted by the public or part of the public as a medium of exchange, without any material restrictions on its use as consideration;
It is worth noting that, according to the definition of the authorities, the stable currency does not qualify for the digital payment token. “Digital tokens linked to the US dollar will not qualify for digital payment tokens, but may be included in the financial services list,” the agency said.