Taxation Of Digital Economy – Singapore vs. Hong Kong
4 Jun 2020 — The competition between Singapore (SG) and Hong Kong (HK) continues from the latest report on digital taxation of their respective Inland Revenue authority. While SG’s IPO market is small in comparison with HK, the recent Global Competitiveness Report reveals that SG is ahead on innovation with 5.3 points against HK’s 4.5.
It appears that SG is currently leading as the cryptohub in Asia with its e-tax guide’s clarity and detail explanation on the income tax treatment of digital tokens, while KPMG’s article (Taxing digital assets in Hong Kong) by John Timpany and Lewis Lu, reveals that the guidance in DIPN 39 provides only very broad-brushed principles.
Nevertheless, good news is that proceeds from the issuance of security tokens in HK and SG are NOT taxable as it is akin to capital in nature. The clarifications from Inland Revenue Authority of Singapore (IRAS) and Inland Revenue Department are welcomed by the growing digital asset community in the region, as this will bring about added clarity for the market to realise its economic benefit eventually.
IRAS e-Tax Guide Income Tax Treatment of Digital Tokens: https://lnkd.in/dv69-PD
Departmental Interpretation And Practice Notes No. 39 (Revised): https://lnkd.in/gbgRfxP