Singapore spells out tax policies on Bitcoin transactions- report
Singapore has started giving guidelines that can help merchants manage tax-related issues about transactions involving Bitcoin, VentureBeat reported. The report said this is one step ahead of the stance of most governments which have not yet given any policies for the digital currency.
The news was first reported by Singapore-based news site and brokering service CoinRepublic when it got a copy of an email sent to The Inland Revenue Authority of Singapore (IRAS), VentureBeat said. The government of Singapore is said to provide guidance that will help merchants manage capital gains, earnings and goods and services tax or GST on Bitcoin and related transactions, the report said.
David Moskowitz, Founder of CoinRepublic told VentureBeat that the guidelines were a right step forward. He said, "The guidance which IRAS laid out is rational and well thought out. As a business owner I can clearly account for my earnings on Bitcoin trades for my clients and my own positions and pay the proper taxes."
Under the GST Act, the government of Singapore does treat Bitcoin as a currency or money. Rather, it is looked at as a "supply of services" since "it involves the granting of the interest in or right over the Bitcoins," the report said.
Part of the letter said, "If the seller is a GST-registered person, he would have to account for output tax on the sale of Bitcoins made in the course or furtherance of his business."
The VentureBeat report also posted a summary of the email. It included the income tax treatment of the digital currency which states:
"Companies which are in the business of buying and selling bitcoins will be taxed based on the gains from their sales of the bitcoins. On the other hand, if the bitcoins are part of the company's investment portfolio acquired for long term investment purposes, the gains from the sales will be capital in nature and thus not taxable for the company."
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