Singapore is renowned worldwide for its market economy, especially for its free, innovative and business-friendly approach.Which is why the decision to tax bitcoin transactions under the goods and services tax is all that more important.With governments around the world still confused on how to approach bitcoin, the Inland Revenue Authority of Singapore has provided clear guidelines on how to tax bitcoins, which is a major step toward regulation.While Singapore isn’t the first country to specify that the cryptocurrency is taxable, its clear tax provisions may become the standard worldwide.And that might be a good thing for the bitcoin universe.Last year saw the rise of the cryptocurrency, making bitcoin a household name, ubiquitous but not fully understood.While the digital currency has been around for over five years, bitcoin’s massive expansion of popularity caught the attention of governments worldwide.But for a currency existing solely in the ether of the Internet, no one really seemed to understand how to approach regulating and taxing it.For example, late last summer Germany clarified how it viewed bitcoins, as personal money, which meant that it was taxable to the individual via sales and capital gains tax.

But its tax law is unclear as to how it will be implemented and how virtual stores that accept bitcoins will be taxed.Later in the year, Slovenia issued a statement that said any income (regardless of what form of currency was used) is taxable as a general income tax.But both Germany and Slovenia left too many questions unanswered.The United States Federal Reserve weighed in on bitcoin too, saying, “virtual currencies like bitcoin have legitimate uses and should not be banned.” But without clear guidelines from the Internal Revenue Service, business owners, merchants, investors and individuals who have bitcoin assets are left in a legal gray area, unsure if their digital funds are taxable, and if so, how.That’s where Singapore comes back in.The IRAS has given a clear and concise set of guidelines for bitcoin taxation.It breaks down like this: If you make money through transactions, like selling goods for bitcoins, they are taxable as income tax.If you make money through investments, otherwise known as capital gains, they are taxable at the current zero percent rate.

(Singapore is very investor-friendly.)Bitcoins are also taxable in a second way, as a GST.Basically a GST means that if the transaction involves real money or services it is taxable (i.e.buying and selling bitcoins with dollars, or paying for services with bitcoins).However, if there are no real world goods or services, like paying for virtual clothing for your World of Warcraft avatar with bitcoins, then the transaction is not taxable.bitcoin billionaire tricksYou can find a full list of the rules the IRAS has set out here.While it is interesting (and perhaps tedious) to outline what is and isn’t taxable, the real point to focus on is how Singapore’s tax rules will affect the global treatment of the decentralized currency.ethereal capture setupSingapore has been looked at as an example of how the free market can excel, rated as the second freest economy in the world in 2013 just behind Hong Kong.bitcoin miner antminer s9

And while staunch libertarians might see any taxation as an evil, setting a global standard, especially one as friendly as the IRAS tax rules, would give the cryptocurrency another level of validity, which it seriously needs.Ultimately, bitcoin users need to embrace taxation as a road that leads to acceptance as a globalized alternative currency.bitcoin litecoin farmerWhile every nation will have different tax laws in the beginning, which will initially make doing business in multiple countries more difficult, the potential of a true global economy exists, free of a centralized bank and therefore bound to its community, to its users.ethereum block difficultySingapore’s new taxation may be just what bitcoin needs.aktienkurse bitcoinBusinessBoeing Announces Layoff Months After Trump's Visit TechnologyHow Finding A Good Doctor Can Be A Matter Of Life And Death WorldNorth Korean Women Declare War On The US NationalAmber Alert Not Issued For Missing Texas Teen Kaytlynn Cargill

As with the United States, Bitcoin regulations in Europe — particularly in the European Union and EFTA — are murky because they can exist at the union level and at the level of the member state.The European Banking Authority in London issued a warning to consumers about so-called “virtual currencies” in December 2013: So far, only warnings to consumers coming out of Brussels.“The National Bank of Belgium (NBB) and the Belgian Financial Services and Markets Authority (FSMA) have issued a joint statement warning investors about the dangers of investing in digital currencies such as bitcoin, writes BitLegal.io.The tax agency in Sofia in April said, “income from the sale or exchange of bitcoins is treated the same as income from the sale of financial assets in a personal income tax context, and the standard 10% personal income tax applied.” “An official from the French Ministry of Economy and Finance told reporters at Le Monde that although the country does not recognize Bitcoin as true currency, French taxpayers are obliged to declare their and pay tax on gains generated from any virtual currency transactions,” writes BitLegal.io.

“[B]itcoins are units that are not expressed in the form of legal tender,” writes the US Library of Congress.“Instead, they are units of value that have the function of private means of payment within private trading exchanges, or they are substitute currencies that are used as a means of payment in multilateral trading transactions on the basis of legal agreements of private law.Reykjavik is hostile toward Bitcoin and the outflow of capital in general.Here is what BitLegal.io writes about Iceland: “Furthermore, the Central Bank considers exports of goods and services in exchange for Bitcoin in breach of these capital controls.Icelandic merchants and service providers are thus not able to legally accept Bitcoin as payment.The Central Bank has yet to take a position on whether Bitcoin is considered a currency according Icelandic law.It does not consider Bitcoin to be e-money.It is unclear if domestic parties are allowed to transact in bitcoin among themselves.Bitcoin mining appears to be tolerated.” Rome has made no explicit regulations regarding Bitcoin other than issuing a decree in April 2014 that defines electronic currencies and allows for their use within the framework of the 2012 EU directive.

"However, the use of electronic currency is restricted to banks and electronic money institutions — that is, private legal entities duly authorized and registered by the Central Bank of Italy," BitLegal.io writes: "Aside from these developments, Italy does not regulate bitcoin use by private individuals, and currently the implementation of initiatives concerning the use of electronic currencies lies with the EU."Oslo does not regard Bitcoin as legal money.Here is what BitLegal.io writes about Norway: Guidance that Ljubljana released in January 2014 requires Bitcoin payment services in the country to adhere to Anti-Money Laundering Laws and Know-Your-Customer Laws.How Bitcoin income is taxed is something of an “it depends” issue right now, as the government expects citizens to pay taxes on income from mining and doesn't if it's income from commerce and exchanging.As BitLegal.io writes: “Switzerland's current law does not include a capital gains tax for private citizens.… Bitcoin holdings must be declared as wealth in a yearly tax declaration with the value they had at the end of the year; a modest wealth tax (e.g.