Singapore’s prevailing income tax rules will apply to transactions of non-fungible tokens (NFTs), local media The Business Times reported on Friday, quoting the city state’s Finance Minister Lawrence Wong.

The income tax treatment “will be determined based on the nature and use of the NFT”, the minister said in a parliamentary reply to Yio Chu Kang SMC Member of Parliament Yip Hon Weng.

This will apply to individuals who derive income from NFT transactions or from trading in NFTs, he reportedly said.

While individuals may derive capital gains from NFTs, Wong said such gains will not be taxable as Singapore does not have a capital gains tax regime.

Elsewhere in US and Australia, taxes have already been applied to NFT transactions, or to virtual currency, according to the report.

Traded since around 2017, NFTs surged in popularity in early 2021. There are NFT artworks selling for millions of dollars.

An NFT is a digital asset that exists on a blockchain, a record of transactions which is kept on networked computers. The blockchain serves as a public ledger, allowing anyone to verify the NFT’s authenticity and who owns it, according to Reuters’ explainer.

Each NFT has a unique digital signature, unlike most digital items which can be endlessly reproduced.

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