Tuesday, April 23, 2024
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Singapore charges income tax on NFT trading

Singapore Finance Minister Lawrence Wong announced on Friday that current income tax regulations in Singapore would apply to transactions involving non-fungible tokens (NFTs). Yet, the nature and use of the token will define how they are used.

Those who rely on NFT transactions or trading as a source of income will face deductions, according to the report. Yet, the country lacks such a system, earned income on NFTs will not be taxed. The US, which has one of the world’s major crypto markets, imposes both an income tax and a capital gains tax on crypto and NFT trading.

In Asia, Singapore has some of the lowest income tax rates, with the top rate for wealthy earnings reaching 22 percent. Indonesia has a high rate of 45 percent, whereas the Philippines has a rate of 35 percent.

Whereas the island national budget for 2022 plans to boost taxes on the rich people, the absence of a capital gains tax makes it a shelter for many high-net-worth individuals.

After China’s crypto market crash last year, the majority of the nation’s exchanges and businesses relocated to Singapore. Once China’s largest crypto exchange, Huobi chose Singapore as its regional headquarters.

According to Statista, roughly 15.8% of the country’s population owns cryptocurrency, compared to 15.5 percent globally.

The CEO of Singapore’s bank Piyush Gupta, DBS, believes that crypto will increase in importance as a store of value, but that it will not replace conventional currency anytime soon.

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