Singapore Electronic Tax Guide: Income from Airdrops or Hard Forks of Cryptocurrency Not Taxable

According to the latest tax guide released by Singapore, acquiring cryptocurrency for free through hard forks or airdrops does not require taxation. The electronic tax guide provides a detailed list of different types of tokens and acquisition methods, along with the corresponding tax obligations.

In the Singapore e-Tax Guide released by the Monetary Authority of Singapore (MAS) last Friday, detailed tax regulations for cryptocurrencies have been updated. Based on different token types: Payment Tokens, Utility Tokens, and Security Tokens, corresponding tax treatments are proposed.

According to the guide, Payment Tokens are considered as intangible property. Therefore, transactions involving the use of Payment Tokens for goods or services payment are treated as barter transactions. The value of the goods or services transferred should be determined at the time of the transaction.

Furthermore, when exchanging goods or services using Utility Tokens, it is unlikely to generate income at the time of the exchange. It may be eligible for tax deductions.

As for Security Tokens, their tax treatment depends on their nature of returns, such as interest or dividends.

The guide primarily targets consumers, businesses, and Initial Coin Offering (ICO) issuers, providing tax explanations for many token applications. For instance, Payment Tokens used as salaries are taxable, income from mining services can also be taxed, and even common practices in cryptocurrencies like airdrops or hard forks acquired for free are exempt from tax. Tokens issued through ICOs may be subject to different tax treatments, including tax exemption, deferred payment, or immediate payment, based on their types.

Reported in January this year, Singapore has officially implemented the Payment Services Act applicable to cryptocurrency service providers, praised by the Financial Action Task Force (FATF) for its advanced regulation. This tax planning further demonstrates Singapore's position as a leading country in cryptocurrency development.