1) Hi Gabriel, tell us more about yourself and your professional background.
I am a chartered accountant and currently sit on the board of 7 companies locally and overseas.
My area of expertise and experiences is in the area of tech, capital markets as well as traditional business such as shipping and oil. All the companies that I have worked with recognised and has benefited from my deep industry knowledge and business acumen. Being able to recognize and relate to the commercial aspect of business and entrepreneurship allows me to better advise companies on regulatory aspects of their business.
2) What are your views on cryptocurrency?
In my honest opinion, Cryptocurrencies are here for the long run. We have gone through the experimental stage and moving on to the herd acceptance phase. Bank and large MNCs are accepting it as part of their investment portfolios. There is no doubt a decentralise financial system or currency can benefit a huge part of the population in this part of the world that may suffer from some form of financial discrimination, restriction of fund movements, high fees and inefficiencies in fund management.
3) The crypto industry has grown a lot since 2017, do you feel this way? Has the industry mature?
Absolutely, as mention above, we have moved on to the herd acceptance phase. The government are more open to cryptocurrency in recent years. Facts are everywhere with large MNC and Banks taking on more investment crypto portfolio.
The Big4 auditing firms have issued circulars and addressed ways to account for cryptocurrencies. We are past the stage from a professional standpoint where we are waiting and looking across our shoulders wondering what to do or how to report such transactions or investments.
4) Do you think companies who have crypto on their balance will have problems in accounting? How should they account for crypto?
No, it is actually very simple. Crypto are classified as either payment, utility or security token. For ease of understanding, I will touch just on the payment token. Payment token is regarded as intangible property. Any transactions involving the use of these tokens in exchange for goods/ services should be valued at the point of transaction. This value is taxable as it is in exchange for goods/ services performed.
Crypto held on the balance sheet of the companies are not taxable in the event there is a capital gain in the future. It is only taxable if IRAS deems your business nature is mainly that of buying/selling crypto with a profit-making purpose.
Hence I have been advocating Singapore as a tax haven for a lot of crypto friend business. Imagine holding a couple of bitcoins at the end of the financial year only to realise the value of these coins has risen over the last couple of months and it is not taxable if it is not revenue in nature in relation to your business.
5) How about crypto-centric companies? For those who did their ICO/ IEO/ IDO in the past, how do you advise in term of their accounting?
For such companies, I strongly advise them to have a proper CFO full time onboard or at least appoint a consultant who would advise them at least on a quarterly basis.
Every scenario is very different. The important thing is to ensure that all documentary evidence are properly kept and the basis of recognition is clearly defined. (revenue/ capital nature). In recent years there have been quite a few ICOs in Singapore. The importance of having sound financial regulatory expertise on board is crucial and I am very confident IRAS takes a serious view on the recognition of such revenue if any.
6) Are the current accounting software ready for crypto bookkeeping?
The main cloud base accounting software that is available in the open market are not designed specifically for crypto. Mainly for my clients, I would use the tax reports available on their wallets or if they subscribe to cryptocurrency tax software such as Koinly, we would upload the details to the cloud-based accounting software if they open up their API.
7) Moving forward, I think Singapore is still crypto-friendly, what should those companies look out for before setting up their company in Singapore.
It is important to have a consultant/accountant who is well versed in the regulatory requirements or have at least set up companies who in some form dealt with crypto in some form. This will allow them to be well versed in the accounting process and regulatory requirements. You can start by asking if they accept crypto for their service rendered. As least I know my company does.
8) Can you share with us some business tips for being an entrepreneur yourself?
If the business makes you lose yourself as a person. It is not worth starting.
9) Lastly give us an inspiring quote as the core takeaway message for all our reader.
Remember this “ I am awesome”.
This interview is curated by Blockcast.cc.
Date of interview: 23 May 2021
Time of interview: 9.00 pm KST
Interviewer: Melody Chan, Editor