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THE CITY-STATE SINGAPORE INTENDS TO TAKE THE IVA OFF OF CRYPTOCURRENCIES TRANSACTIONS

Singapore, one of the world’s most populated countries, is considered a great financial center today. Located in the Asian continent, the country is not a poor island since around 1965, and now it is one of the richest nations all around the world. It is a part of the Asian Tigers, (with Hong Kong, South Korea, and Taiwan), had its independence conquered and went through a very fast industrial and economical evolvement in the last 50 years. 

The country that is considered the “Asian Pearl”, is on the places that most create millionaires, also being one of the most expensive places to live. Going against many of the world’s economies that are against the cryptocurrencies market and discourages their citizens to get involved in the market, Singapore has been encouraging the adoption of the cryptos and using the assets for many kinds of transactions. 

Cryptocurrencies do not possess a specific regulation, nor a unique international way for the digital currencies and their legality depends on each country. Bitcoin, just like many other assets, are decentralized, having less bureaucracy on its transactions. 

Besides not existing any universal regulations for BTC and this cryptos universe, the authorities are beginning to notice that having the minimum regulations would be better for the greatest part of the States. The decentralized BTC nature could make it easier to go through money laundry. Showing the need for regulations for the sector.

In Singapore’s case, there are some specific regulations and tributes. Besides not having impositions of a very bureaucratic nature, the payment tokens and the safety tokens require legal attention due to its nature, while the Utility tokens do not require too much attention. 

The country has the intention of exempting the assets that want to work as a GST (Goods and Service Tax) way of exchange, which is equal to the VAT (Value Added Tax). This news was revealed in an electronic tax guide published by IRAS (Inland Revenue Authority of Singapore), at the beginning of July.

If the exemption is accepted, it must be valid in July 1st 2020, reviewing the actual system. This system has a digital payment token supply, which is like a tribute service payment. 

There will be two main changes proposals for the taxing in the future; the digital payment as a payment method for material or services will not supply these tokens and the digital payment tokens exchange per asset or other digital payment tokens will be exempt from GST.

Cryptocurrencies that may be in the digital payment token definition to be used as an exchange method, according to IRAS, are: Bitcoin, XRP, DASH, Zcash, Monero, Ether and Litecoin. The cryptoassets linked to fiduciary will be excluded, with a few stablecoins – which means that it will keep being taxed by GST after 2020’s beginning. 

These changes may reduce even more the country’s bureaucracy if they come true. It is previewed that before 2019 July’s end the feedback about these crypto’s economic universe changes proposals will be presented, bringing more looks around the world.