Tax on crypto transactions
GST treatment of cryptocurrencies
For Goods & Services Tax (GST) purposes, the following use of digital payment tokens are exempt from GST or disregarded as a supply:
According to IRAS
last revised on 25 August 2021
Supply of Digital Payment Tokens from 1 Jan 2020
The following supplies of digital payment tokens are exempt from GST:
- Exchange of digital payment tokens for fiat currency or other digital payment tokens
Example 1: Exchange of one digital payment token for another
You exchange Bitcoin for Ether from GST-registered company A. With effect from 1 Jan 2020, both your supplies are exempt from GST— your exempt supply of Bitcoin and A's exempt supply of Ether. Both of you do not have to charge or account for output tax. Instead, both of you will report the net realized gain/loss from your exchange transactions as exempt supplies in your GST returns.
- Provision of loans of digital payment tokens
Example 2: Loans of digital payment tokens
You make loans of Digital Payment Token Z in return for interest income. With effect from 1 Jan 2020, you will report the interest received as your exempt supplies in your GST return.
The use/ provision of digital payment tokens as payment for anything (other than fiat currency or other digital payment tokens) is disregarded as a supply for GST purposes.
Whether digital payment tokens or fiat currency are used to purchase goods and services, GST is chargeable only on the supply of goods and services, unless the supply is an exempt, zero-rated or out-of-scope supply.
Example 3: Use of digital payment tokens as payment
You use Bitcoin to purchase software from GST-registered company B. With effect from 1 Jan 2020, you will not be considered as making any supply of Bitcoins and thus, will not need to account for output tax. Company B will have to account for output tax on its supply of software.
Please refer to GST: Digital Payment Tokens (PDF, 293KB) for more information on the characteristics of Digital Payment Tokens and the GST reporting requirements.