Max E.Tue, Mar 15, 2022 1:15 PM
Singapore Taxes Income From The Sale Of NFTs
The Singapore authorities will start collecting income tax on funds received from the sale of NFTs, stated the Minister of Finance of Singapore in his address to Parliament.
The minister further explained that there would be no tax on capital gains (profits from the sale of an asset) in the context of NFT transactions, since there is no such tax in the country. The tax will be levied on those making profits off transactions, involving NFTs, or trading tokens, the head of the Ministry of Finance specified.
In order to determine the purpose of an NFT purchase and whether it would be subject to tax, the authorities will monitor the frequency and volume of token transactions, and “the nature of the asset.”
The changes will take effect from March 2023.
NFTs are already subject to taxation in the US and Australia. In Australia, NFTs are taxed on income and capital gains. In the US, transactions with NFTs are subject to property tax.
The maximum income tax rate in Singapore is 22%. It is levied on incomes exceeding $235,000.
According to the Google Trends service, a record number of search queries for “NFT” was observed in early autumn last year. Residents of the Asia-Pacific region showed the greatest interest in NFTs: China, Singapore and Hong Kong were in the top three.
In February 2022, representatives of the Central Bank of Singapore stated that they did not intend to regulate the NFT market. The head of the Monetary Authority of Singapore noted that the department he manages takes a "technically neutral position." According to him, non-fungible tokens will be subject to the regulations of the Monetary Authority only if their characteristics are mentioned in the Securities and Futures Act (SFA).
The Managing Director of MAS previously noted that Singapore, which had already gained the reputation of the “cryptocurrency hub of Southeast Asia”, does not intend to ban Bitcoin and other digital assets, as they can play an important role in the digital future.