You got to hand it to Singapore. They are really on the bulk. While many other jurisdictions are still fumbling around and twiddling their thumbs as to what to make of the recent bitcoin phenomenon, Singapore has issued tax regulations regarding bitcoin transactions. Thanks to Singapore-based bitcoin brokering service, CoinRepublic, we now know the policy of Singapore’s revenue authority, the Inland Revenue Authority of Singapore (IRAS). According to IRAS, bitcoin is not to be treated as money, however, its exchange and its buying and selling will be treated as services.
The big thing to pay attention to is whether the transaction originated in Singapore or outside of Singapore. According to the IRAS, the determination of whether the bitcoin transaction will be taxed based on the GST schedule will depend if the company is either just facilitating an exchange or is an actual principal of the transaction. If the company is just facilitating an exchange, only the commission is going to be taxable. However, if the company is actually a principal and collecting bitcoin, then, it is a principle and then GST is charged to the full bitcoin amount received. Keep in mind that, the GST will only apply to companies that are based in Singapore. If the company isn’t based in Singapore and the supplier of the bitcoin is located outside the country, it’s not taxable. This is very rational and reasonable regulation.
Expect more regulations in the near future as more and more governmental agencies wake up to the reality of bitcoin.