Sale and purchase of Bitcoins will be subject to taxation on the gains made on the sale of Bitcoins. However, if the Bitcoins form part of a business' investment portfolio, the IRAS will consider the gains from any sale to be capital in nature and not subject to taxation.
For Goods and Services Tax (GST), however, the situation is a little more complicated. Selling Bitcoins in return for goods or services is considered to be subject to GST. If the seller is GST registered, they will need to account for this in the course of their business activities.
The exception to this is in the form of virtual goods, such as in virtual gaming worlds, to use the IRAS' example. These are not subject to GST until they are exchanged for real services or goods.
Bitcoin itself is not considered a good, nor does it qualify as money or currency, according to the IRAS and under Singapore's GST Act. Instead, the supply of Bitcoins is examined under GST and varies according to how the service is provided.
Companies that merely facilitates and is acting as an agent in the Bitcoin trade will have GST chargeable on the commission fees received. However, if the company is acting as a principal in the Bitcoin trade (eg, buys and onward sells Bitcoins to the customer), GST is chargeable on the full amount received, ie, the sale of Bitcoins and commission fees."
Singapore's GST Act already indicates that if the business supplying services belongs to another country, then the entire supply shall be deemed to have been made outside of Singapore. The IRAS states that this would mean that GST would not be imposed.