JUL 09, 2019 | 22:30
Several countries, such as Japan and Switzerland, are already taking action to boost the growth of their crypto industry.
Most recently, the Inland Revenue Authority of Singapore (IRAS), acknowledging the importance and growth of crypto assets, proposed legislation to exempt cryptocurrencies from the Goods and Services Tax (GST), also known as value-added tax (VAT). The IRAS e-Tax Guide (Draft), dated July 5, 2019, highlights,
The new tax treatment would take effect on January 1, 2020.
In contrast, U.S. tax authorities seem to be aiming to stifle the nascent crypto industry with stricter controls. As award-winning writer Adriana Hamacher reports, “The U.S. Internal Revenue Service (IRS) proposes electronic surveillance to weed out Bitcoin tax evasion.”
Presently, the U.S. IRS considers Bitcoin and all other all cryptocurrencies as property for U.S. federal tax purposes. Buying Bitcoin is not a taxable transaction.
However, paying with Bitcoin to buy something else is considered a sale of Bitcoin, such as the sale of a property. Consequently, it is a taxable event. The IRS notice IR-2018-71, issued on March 23, 2018, states,
“Virtual currency transactions are taxable by law, just like transactions in any other property.”
This tax treatment might soon change. Some policymakers are pressuring the IRS to update its 2014 guidance on cryptocurrencies, which according to the Wall Street Journal, could happen within weeks