Cryptocurrency and digital assets have become a mainstream feature of investment portfolios, startup fundraising, and international payments. Yet for many individuals and businesses in Singapore, the tax treatment of digital payment tokens (DPTs) remains unclear. This guide explains how the Inland Revenue Authority of Singapore (IRAS) treats DPTs for income tax and GST purposes in 2026, with practical guidance on what activities are taxable, what records you need to keep, and how to stay compliant.

Singapore’s Framework for Digital Payment Tokens

Singapore regulates digital assets primarily through the Payment Services Act (PSA), administered by the Monetary Authority of Singapore (MAS). Under the PSA, a “digital payment token” is a digital representation of value that:

  • Is expressed as a unit
  • Is not denominated in any currency and is not pegged to any currency
  • Is, or is intended to be, a medium of exchange accepted by the public as a means of payment
  • Can be transferred, stored or traded electronically

Bitcoin, Ether, and most major cryptocurrencies fall within the DPT definition. “Security tokens” — digital representations of equity, debt, or other investment interests — are treated differently and regulated as capital markets products under the Securities and Futures Act.

Income Tax Treatment of Digital Payment Tokens

No Capital Gains Tax — in Principle

Singapore does not have a capital gains tax. Gains from the disposal of capital assets — including DPTs held as investments — are generally not taxable. This is the same principle that applies to gains on share disposals, property sales, and other capital assets.

In practice, however, IRAS determines whether crypto gains are capital or revenue in nature on a fact-specific basis. If the gains are classified as revenue (i.e., arising from a trading activity), they are subject to income tax at the applicable corporate rate (17%) or individual rate (up to 24%).

Trading vs Investment: How IRAS Draws the Line

IRAS applies the classic “badges of trade” analysis to determine whether crypto activity constitutes a trade. Relevant factors include:

  • Frequency of transactions — frequent buying and selling of DPTs is more likely to be treated as trading income
  • Holding period — short holding periods suggest a trading intent; long-term holding is more consistent with investment
  • Purpose of acquisition — acquiring DPTs for price appreciation and long-term wealth preservation points to investment; acquiring for resale at a profit points to trading
  • Whether DPTs are the subject of a trade — a business whose core activity involves buying and selling DPTs will be treated as a trader
  • Use of leverage or borrowed funds — financing DPT purchases with debt to amplify returns is associated with trading activity
  • Volume and value — large-volume, high-frequency activity is more consistent with trading

IRAS published an e-Tax Guide on Income Tax Treatment of Digital Tokens in 2019, with updates in subsequent years, that sets out this framework in detail. The key takeaway: there is no safe harbour. Whether your crypto gains are taxable depends on your specific circumstances.

What Is Clearly Taxable

The following crypto-related income is clearly taxable as business or employment income in Singapore:

  • Income from DPT trading businesses — crypto exchanges, market makers, and professional crypto traders whose primary business is DPT trading
  • Mining income — income from cryptocurrency mining is generally treated as business income, with the DPT valued at market price when received; mining expenses (electricity, hardware depreciation) are generally deductible
  • Staking rewards received as compensation — where staking is done as part of a business or professional activity, rewards may be taxable as income
  • Crypto received as employment remuneration — DPTs received in exchange for employment services are taxed as employment income, valued at the market price on the date of receipt
  • Crypto received for professional services — freelancers, consultants, and sole proprietors who accept DPTs as payment for services must include the SGD equivalent (at the date of receipt) as business income
  • Income from DPT-related financial services — income earned by licensed Digital Payment Token Service Providers from facilitating DPT transactions

GST Treatment: DPTs Are Exempt

Prior to 2020, the GST treatment of DPTs was uncertain — some DPT transactions were treated as taxable supplies, which created a compliance burden. From 1 January 2020, IRAS changed the GST treatment of DPTs:

  • The exchange of DPTs for fiat currency or other DPTs is an exempt supply — no GST is chargeable on such transactions
  • The provision of DPT exchange services (i.e., running a crypto exchange) is an exempt financial service

However, when DPTs are used as payment for goods or services, the underlying supply of those goods or services remains subject to GST if the supplier is GST-registered. The DPT itself is not the subject of the GST — the goods or services supplied in exchange for the DPT are. The GST is calculated on the open market value of the consideration received.

Non-Fungible Tokens (NFTs)

IRAS has not issued a specific ruling on NFTs, but the general income tax principles apply. NFTs are not DPTs under the PSA (they are not fungible and not used as a medium of exchange), so the DPT-specific GST exemption does not automatically apply to NFT transactions.

For income tax purposes:

  • Gains from NFT trading are likely to be taxable as business income if the seller is in the business of buying and selling NFTs
  • Creators who sell NFTs for income (artists, musicians, developers) are likely to be taxed on proceeds as business or trade income
  • Investors holding NFTs for long-term capital appreciation may be able to argue for capital treatment, though this is fact-specific

DeFi (Decentralised Finance)

DeFi activities — liquidity provision, yield farming, lending protocols, and automated market making — present complex tax questions that IRAS has not yet addressed through specific guidance. The general principles apply:

  • Interest or yield received from DeFi protocols may be treated as income if it is earned in the course of a business
  • Liquidity pool rewards may be treated as income when received
  • Swaps of one DPT for another within a DeFi protocol may constitute a taxable disposal for income tax purposes if the activity is treated as trading

Given the complexity and the absence of specific IRAS guidance on DeFi, taxpayers with material DeFi exposure should seek professional advice and maintain detailed records of all transactions.

Record-Keeping Requirements

IRAS requires taxpayers to keep records sufficient to support their tax returns for five years from the end of the relevant Year of Assessment. For DPT activities, this means:

  • Transaction records for every purchase, sale, exchange, or receipt of DPTs — including date, amount, price in SGD at the time of the transaction, and the counterparty
  • Wallet addresses and exchange account statements
  • Records of DPTs received as income (mining, staking, employment, services) — including the SGD market value on the date of receipt
  • Records of DPT-denominated business expenses — including the SGD equivalent at the date of payment
  • Any smart contract interactions relevant to your DeFi activities

Many crypto exchanges and portfolio trackers (Koinly, CoinTracker, and similar tools) can generate transaction reports that assist with record-keeping and tax preparation.

Filing Your Tax Return

If you have taxable DPT income as an individual, this is declared in your annual income tax return (Form B or Form B1) under the relevant income category (trade income, employment income, or other income). If you operate a DPT business through a company, the income is reported in the company’s corporate tax return (Form C or Form C-S).

IRAS does not have a specific DPT schedule in Singapore tax returns — DPT income is simply folded into the relevant income category. Clear documentation of how you have classified your DPT activities (trading vs investment) and how you calculated your income figures is essential in the event of an audit.

Practical Steps for 2026

If you hold or transact in DPTs, here is what you should do now:

  • Assess your activity — consider honestly whether your DPT activity looks more like trading or investing, using the badges of trade factors above
  • Maintain records — export complete transaction histories from all exchanges and wallets; do this regularly rather than at year-end
  • Value your income correctly — DPTs received as income should be valued at the SGD market price on the date of receipt, using a reputable price source
  • Seek advice if your DPT activity is material — the classification question (capital vs revenue) is significant and the stakes increase with the volume of your activity
  • Register for GST if required — if you are supplying taxable goods or services (even if accepting DPT as payment) and your taxable turnover exceeds S$1 million, you must register for GST

At Raffles Corporate Services, our accounting and tax team assists businesses and individuals with Singapore corporate tax compliance, including for entities with DPT income. We can help you assess the tax treatment of your crypto activities, maintain proper records, and prepare accurate tax returns.

Contact us at [email protected] or reach us on WhatsApp at +65 8501 7133.

— The Editorial Team, Raffles Corporate Services