24 August 2016
Find out more

Singapore lays down tax rules for bitcoin business

09 January 2014  |  4619 views  |  0 Singapore Building 1

As governments the world over make dire warnings about the perils of using bitcoin, Singapore has taken a more relaxed, and profitable, attitude to the virtual currency by issuing clear guidance to users on how to handle taxation issues arising from transactions.

In an e-mail exchange with bitcoin brokering service CoinRepublic the Inland Revenue Authority of Singapore has spelled out the rules governing capital gains, earnings, and even GST (sales tax) on bitcoin exchanges and bitcoin related sales.

On income tax, the Iras says: "Companies which are in the business of buying and selling bitcoins will be taxed based on the gains from their sales of the bitcoins. On the other hand, if the bitcoins are part of the company's investment portfolio acquired for long term investment purposes, the gains from the sales will be capital in nature and thus not taxable for the company."

And while using bitcoins to buy virtual services will not be subject to tax, a sales tax on purchases made for physical goods will be levied, as it will on companies that supply bitcoins in exchange for legitimate currencies. The rules will not apply to foreign brokers selling bitcoins to Singapore-based customers.

"Overall, the GST treatment of bitcoins will depend on the business arrangement and contractual terms between the parties involved," states the authority.

Elsewhere in the bitcoin ecosystem, the legitimacy of the coin was given another boost by the decision of opnline retail giant Overstock.com to move forward on plans to accept bitcoin payments. About $10,000 worth of bitcoins had already been spent within hours of Overstock opening its doors to the crypto-currency late on Thursday.

Overstock.com makes more than $1.3 billion per year from sales, making it the largest company to accept Bitcoin to date, although it may soon be outstripped by online electronics giant Newegg, which tweeted yesterday:


Another confidence booster comes Elliptic Vault, a London-based start-up that insures deposits of the digital currency against loss and theft. Underwritten by Lloyd's of London, Elliptic stores user's cryptographic keys on offline servers in a secure location. The company is banking on business from bitcoin holders fearful of losing their horde to online hackers.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Indian bitcoin exchange shuts after central bank warning

Indian bitcoin exchange shuts after central bank warning

02 January 2014  |  6785 views  |  1 comments | 7 tweets | 3 linkedin
Bitcoin tanks after Chinese exchange blocks new deposits

Bitcoin tanks after Chinese exchange blocks new deposits

18 December 2013  |  4807 views  |  0 comments | 9 tweets | 4 linkedin
Norway says bitcoin an asset, not a currency

Norway says bitcoin an asset, not a currency

16 December 2013  |  5642 views  |  2 comments | 11 tweets | 6 linkedin
Swiss to vote on proposals to treat bitcoin as foreign currency

Swiss to vote on proposals to treat bitcoin as foreign currency

10 December 2013  |  35344 views  |  0 comments | 31 tweets | 13 linkedin
Senate Committee sets date for bitcoin hearing

Senate Committee sets date for bitcoin hearing

11 November 2013  |  6990 views  |  0 comments | 6 tweets | 4 linkedin
Bitcoin firms meet UK govt officials as regulation looms

Bitcoin firms meet UK govt officials as regulation looms

06 September 2013  |  9376 views  |  1 comments | 7 tweets | 6 linkedin
Germany declares bitcoin 'private money' and subject to tax

Germany declares bitcoin 'private money' and subject to tax

19 August 2013  |  8584 views  |  0 comments | 13 tweets | 10 linkedin
US judge rules bitcoin is real money

US judge rules bitcoin is real money

08 August 2013  |  10399 views  |  0 comments | 17 tweets | 10 linkedin
UK civil servants ponder bitcoin threats - FT

UK civil servants ponder bitcoin threats - FT

14 May 2013  |  6835 views  |  1 comments | 5 tweets | 1 linkedin
European Central Bank warns of virtual currency risks

European Central Bank warns of virtual currency risks

30 October 2012  |  11901 views  |  6 comments | 19 tweets | 5 linkedin

Related blogs

Create a blog about this story (membership required)
Find out moreVisit equens.comVisit www.abe-eba.eu

Top topics

Most viewed Most shared
hands typing furiouslyBlockchain: what to expect for 2017?
7623 views 0 | 51 tweets | 41 linkedin
hands typing furiouslyBig Data's Three Big Trends in 2016
6421 views 3 | 21 tweets | 11 linkedin
Teenager avoids conviction for CommBank DDoS attackTeenager avoids conviction for CommBank DD...
5948 views comments | 2 tweets | 3 linkedin
Nordea looking for AI and blockchain breakthroughsNordea looking for AI and blockchain break...
5862 views comments | 17 tweets | 17 linkedin

Featured job

Find your next job