Singapore Issues Bitcoin Tax Guidance

The Singapore tax authority has issued guidance which confirms the viability of certain Bitcoin transactions. Like the central bank in China, the Inland Revenue Authority of Singapore (IRAS) took the position that Bitcoin is not a type of money or currency. This is still an unsettled question in other jurisdictions.

Even if Bitcoin is not currency, transactions in Bitcoins can lead to profits which the Singapore authority is happy to tax, at least in some situations. According to the IRAS guidance, short-term speculative transactions in Bitcoins will be taxed, while capital gains generated from long-term investment will be tax free. The IRAS guidance also distinguishes using Bitcoins in purchase of physical goods (taxable) and of virtual goods (not taxable).

The IRAS guidance has been warmly welcomed within the Bitcoin community in Singapore for being "rational and well thought-out." Some observers believe that, given the embryonic state of the Bitcoin economy, an incremental and pragmatic approach to regulation makes more sense than attempts to impose blanket definitions or characterization, let alone any outright prohibitions, on transactions in this new and emerging unit of value.

Topics:  Bitcoins, Income Taxes, International Tax Issues, Virtual Currency

Published In: Finance & Banking Updates, Science, Computers & Technology Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pillsbury Social Media, Entertainment & Technology Team | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »