Why Singapore Charges No Capital Gains Tax on Crypto

When you hear that Singapore doesn’t levy capital gains tax on crypto, you might wonder how that works and what it means for you. Below you’ll learn exactly why the tax break exists, who can benefit, and what you need to do to keep everything legit.

TL;DR - The Bottom Line

• Individuals who buy, sell or trade crypto in Singapore pay zero capital gains tax.
• Only income earned from crypto‑related business activities is subject to Singapore’s corporate income tax (currently 17%).
• To enjoy the tax advantage you must be a tax resident - typically 183+ days in the city‑state or strong economic ties.
• Businesses need a licence under the Payment Services Act and must meet strict AML/KYC requirements.

How Singapore Treats Crypto for Individuals

Singapore is a city‑state with a territorial tax system that only taxes income sourced or derived locally. Because crypto is classified as Cryptocurrency - an intangible property, not legal tender - any profit you make from selling or swapping it is considered a capital receipt, not income. The result? No capital gains tax, regardless of how much you earn or how long you hold the asset.

This rule applies to all major tokens - Bitcoin, Ethereum, Solana, stablecoins - and even to crypto‑to‑crypto swaps. The only time tax kicks in is if you are running a crypto‑related business (e.g., a trading firm, a mining operation, or a payment service). In that case, profits are treated as ordinary income and taxed at the standard corporate rate.

When Crypto Becomes Taxable for Businesses

Businesses that accept crypto as payment for goods or services must record the fair market value of the token at the time of receipt. That value is then subject to the 8% Goods and Services Tax (GST) on the sale of the underlying product, but the crypto itself remains untaxed.

Companies whose core activity is crypto trading, token issuance, or operating a digital exchange are classified as Digital Token Service Provider (DTSP) under the Payment Services Act. Those firms pay the 17% corporate income tax on net profits, just like any other Singapore‑registered company. The tax rate is low compared with many Western jurisdictions, which adds to the appeal.

Steps to Secure the Tax Advantage as an Individual

1. Establish tax residency - spend at least 183 days per calendar year in Singapore or demonstrate strong economic ties (e.g., home lease, employment, or a local bank account).
2. Open a Singapore‑based bank or crypto wallet. Many exchanges (Binance, Crypto.com, Coinbase) have local subsidiaries that make this simple.
3. Keep clear records of every crypto transaction - date, amount, fair market value in SGD, and counterparties. Even though you won’t pay tax, good records protect you if the Inland Revenue Authority of Singapore (IRAS) ever asks for proof.
4. File a personal income tax return (Form B1) as usual. Declare any crypto‑related income that falls under business activity; otherwise, leave the capital gains sections blank.
5. Consider professional advice if you plan to transition from casual investing to a crypto‑based business.

How Businesses Can Get Licensed

To operate legally, a crypto firm must apply for a licence from the Monetary Authority of Singapore (MAS). The licensing process usually takes 6‑12 months and involves:

• Submitting a detailed business plan and AML/CFT policies.
• Demonstrating that senior staff have suitable qualifications (e.g., AML certifications).
• Implementing robust KYC systems for customers.
• Appointing a compliance officer and setting up transaction monitoring tools.
• Paying application and annual fees (often SG$50,000‑SG$200,000 for the first year).

Once approved, the firm can offer payment services, operate a digital asset exchange, or provide custodial services, all while enjoying Singapore’s zero capital gains tax on any asset sales.

Quick Comparison with Other Crypto‑Friendly Jurisdictions

Checklist for Individuals

• Confirm tax residency status (183‑day rule or economic ties).
• Maintain a transaction log (date, token, amount, SGD value).
• Use a Singapore‑based exchange or wallet for easier reporting.
• Report any crypto‑related business income on Form B1.
• Keep receipts for crypto purchases used to pay for goods/services (GST may apply).

Checklist for Crypto Businesses

• Prepare a detailed AML/CFT compliance manual.
• Hire or designate a qualified compliance officer.
• Submit a licence application to MAS under the Payment Services Act.
• Set up KYC/transaction monitoring software before launch.
• Budget SG$50,000-SG$200,000 for initial licensing and compliance costs.
• File corporate tax returns annually; claim any allowable deductions.

Common Pitfalls & Pro Tips

Pitfall: Assuming zero tax means no reporting. Even with no capital gains tax, IRAS may still request transaction records to confirm you’re not running a business.

Pro tip: Use dedicated crypto accounting tools (e.g., Koinly, CoinTracker) that can import exchange data and generate a simple CSV for IRAS.

Pitfall: Mixing personal and business crypto wallets. This can blur the line between taxable income and non‑taxable gains.

Pro tip: Keep separate wallets and bank accounts for personal investing vs. business operations. It makes compliance far easier.

Pitfall: Ignoring GST when accepting crypto for product sales. The token itself isn’t taxed, but the sale of the product is.

Pro tip: Register for GST if your annual taxable turnover exceeds SG$1million. Charge 8% GST on the fiat value of the goods and report it in your GST returns.

Frequently Asked Questions