As published on businesstimes.com.sg, Friday 11 March, 2022.
SINGAPORE'S prevailing income tax rules will apply to transactions of non-fungible tokens, or NFTs, said Finance Minister Lawrence Wong in Parliament on Friday (Mar 11).
In a parliamentary reply to Yio Chu Kang SMC Member of Parliament Yip Hon Weng, Wong said that the income tax treatment "will be determined based on the nature and use of the NFT".
This will apply to individuals who derive income from NFT transactions or from trading in NFTs, he added.
However, he also noted that individuals may also derive capital gains from NFT transactions.
"As Singapore does not have a capital gains tax regime, such gains will not be taxable," said Wong.
Taxes have already been applied to NFT transactions, or to virtual currency, in countries such as Australia and the US.
The Australian Taxation Office guided for NFT taxation to follow the same general principles as that of cryptocurrency. Similar to Singapore, income tax applies to revenue from the trading of NFTs and when NFTs are used as part of a business of profit-making scheme.
In Australia, NFTs may also be subject to capital gains tax upon disposal.
Meanwhile, in the US, virtual currency is treated as property for federal income tax purposes and capital gains or losses must be recognised upon the sale of virtual currency for real currency.