SINGAPORE TAXES INCOME EARNED FROM NFT TRANSACTIONS

Income tax registration in Singapore will be determined depending on the nature and use of the NFT.

TAXATION OF NFT
According to the latest report by The Business Times, Singapore's Finance Minister Lawrence Wong said in his address to parliament that the current income tax rules will apply to income received from transactions with non-exchangeable tokens (NFT) or trading in them. Wong explained that due to the absence of a capital taxation regime in Singapore, individuals receiving capital gains from NFT transactions will not be taxed.

The news comes amid recent tax changes that many analysts believe will help reduce inequality, strengthen the social contract and boost spending in the long run.

SINGAPORE'S "TECHNICALLY NEUTRAL POSITION" ON NFT
Earlier this January, Singapore officials warned citizens about decisions related to digital investment instruments, especially in the nascent NFT and metaverse sectors. Despite the fact that Singapore is often touted as the next crypto center in Asia, he called on global regulators to strengthen control over digital investments. This was shown by a thorough study of the risks associated with technologies such as blockchain, decentralized finance, NFT and the metaverse.

Last month, Singapore's central bank said it would not regulate the NFT market. Responding to a parliamentary question on the regulation of the NFT, Tharman Shanmugaratnam, Senior Minister and Minister in charge of the Monetary Authority of Singapore (MAS), stated:

"MAS does not and cannot regulate all the things or products that people have decided to invest their money in. We take into account the nature of the asset when assessing whether a product or activity should fall under the regulatory authority of MAS. MAS does not currently regulate NFTs, given the nature of their underlying assets, as, for example, in several previous examples. This is also the position of most other leading jurisdictions."

Asking consumers to exercise extreme caution, Shanmugaratnam said that MAS has chosen a "technically neutral position" and added that it is "reviewing" the main functions of the token to determine whether it should be regulated by a regulatory body. MAS regulatory requirements will apply to NFTs if they have the characteristics of a capital markets product in accordance with the Securities and Futures Act (SFA).

Meanwhile, Ravi Menon, managing director of MAS, previously reported that the city-state has no plans to ban bitcoins and cryptocurrencies, as they can become a vital player in the digitized future.