Bitcoin tax: the U.S. & Singapore go to extremes

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The U.S. IRS proposes electronic surveillance to weed out Bitcoin tax evasion whereas Singapore plans to exempt cryptocurrencies from value-added tax.

 

 

 

Last week, Singapore proposed to exempt Bitcoin and cryptocurrency transactions from value-added tax (VAT.) In America, meanwhile, it seems things are about to get a whole lot more taxing. 

 

The Internal Revenue Service (IRS) is expected to issue new guidance on how cryptocurrencies will be taxed in the coming weeks, and the taxman is licking his lips.

 

Using Bitcoin and other cryptocurrencies to pay for goods and services, trading, selling, mining and airdrops are all currently taxable in the U.S. But recent data suggest that people aren’t taking those rules very seriously. Only 53 percent of Americans had plans to report their cryptocurrency gains or losses, according to one survey.  

 

So the IRS is proposing a host of measures to identify and prosecute crypto tax evasion. They range from grilling family and friends, searching through social media posts and block explorer data, using electronic surveillance to determine whether a taxpayer transacts in, or maintains a balance of, Bitcoin, and issuing subpoenas to access bank, PayPal and other account data. 

 

Meanwhile, in Singapore, a more Zen approach seems to be in play. The state tax agency is proposing to exempt cryptocurrency from VAT, which is called goods and services tax there (and covers transactions which function as a medium of exchange). The same approach has already been taken by other jurisdictions, notably Australia, Germany and Portugal.

 

If adopted by Singapore’s Parliament, the proposal will become law in January.

 

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