..With mounting interest from prominent investors and growing acceptance from regulators, bitcoin — either the new gold or the next Dutch tulip craze, depending on who is being asked — is at the center of the virtual money universe. Yet there are dozens of digital alternatives, like PeerCoin, Litecoin and anoncoin, whose backers point to advantages they say their currency has over bitcoin...

Bitcoin advocates entered Washington a year ago with the shadow of a federal criminal investigation cast over the virtual currency industry.

Their first mission: Win over, or at least not alarm, the U.S. Treasury Department’s Financial Crimes Enforcement Network, called Fincen.

“Our first reaction, particularly when I was on the law enforcement side, when we had something new was ‘Huge risk! Huge risk for money laundering. It’s bad!’” Fincen Director Jennifer Shasky Calvery said in an interview this week. “But we’re the Department of the Treasury, we can’t have that knee-jerk of a response.”

In March, Fincen issued rules stating that Bitcoin businesses may be considered money transmitters, which must abide by anti-money-laundering laws. The industry welcomed the move because it provided a road map for complying with regulations, and helped erode Bitcoin’s reputation as an enabler of illicit transactions.

That was the “starting-gun shot” of Bitcoin’s activities in Washington, said Marco Santori, chairman of the Seattle-based Bitcoin Foundation’s regulatory affairs committee, who said he met with Shasky Calvery.

Here’s a summary of what the IRAS,(The Inland Revenue Authority of Singapore), has said:

Income Tax Treatment

"Companies which are in the business of buying and selling bitcoins will be taxed based on the gains from their sales of the bitcoins. On the other hand, if the bitcoins are part of the company’s investment portfolio acquired for long term investment purposes, the gains from the sales will be capital in nature and thus not taxable for the company."

GST Treatment

"The sale (including the exchange) of bitcoins in return for a consideration in money or in kind is a taxable supply of services subject to GST. If the seller is a GST-registered person, he would have to account for output tax on the sale of bitcoins made in the course or furtherance of his business. "

"Where bitcoins are accepted as payment for real goods or services (e.g. digitized items like online music), such transactions are treated as a barter exchange. GST should be accounted for on the individual supplies made (i.e. the supply of bitcoins and the supply of real goods or services) if the parties involved are GST-registered persons. However if the bitcoins are used to exchange for virtual goods or services within the virtual gaming world, as a concession, the supply of bitcoins will not be taxed until the bitcoins are exchanged for real monies, goods or services."

"As bitcoin does not fall within the definition of ‘money’ or ‘currency’ under the GST Act, a supply of bitcoins is not a supply of money and would not be disregarded for GST purposes. The supply of bitcoins would be treated as a supply of services as it involves the granting of the interest in or right over the bitcoins."

"The GST treatment of the supply of bitcoins will depend on whether the company is acting as an agent or principal in the transaction. If the company merely facilitates and is acting as an agent in the bitcoin trade (e.g. bitcoin exchange transfer bitcoins directly to the customer’s wallet), GST is chargeable only on the commission fees received. However if the company is acting as a principal in the bitcoin trade (e.g. buys and onward sells bitcoins to the customer), GST is chargeable on the full amount received, i.e. the sale of bitcoins and commission fees. "

"Under section 13(4) of the GST Act, a supply of services shall be treated as made in another country if the supplier belongs in that other country. In this case, if the company belongs outside Singapore (i.e. there is no business or fixed establishment in Singapore), the supply of bitcoins shall be treated as made outside Singapore. Accordingly, GST is not chargeable on the supply of services (i.e. bitcoins) made outside Singapore. "

"Overall, the GST treatment of bitcoins will depend on the business arrangement and contractual terms between the parties involved. "