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Hobbyist Miners Are Exempt From Tax in Singapore

Singapore’s tax authority has updated its guidance regarding digital tokens, exempting “hobbyist” miners from taxation. The Inland Revenue Authority of Singapore, or IRAS, issued updated tax guidance for digital tokens on April 17. The guidelines concern payment tokens, utility tokens, security tokens, and tokens issued through initial coin offerings, or ICOs. Fluctuations in the value tokens held by miners, ICO issuers, businesses, and individuals are not taxable or deductible unless realized. Businesses handling tokens receive usual treatment Despite emphasizing that payment tokens are not legal tender, Singapore’s new guidelines state that transactions executed using payment tokens “are viewed as barter trade.”

When receiving payment tokens, a business will incur normal tax obligations based on the value of the underlying goods sold, while usual deductions are available to businesses that pay for goods and services using payment tokens. While payments made using utility tokens are “unlikely to create an income subject to tax,” utility tokens may “give rise to a deductible expense subject to usual deduction rules.” Read More...