European Court Rules Bitcoins Tax Exempt
Posted by: Timothy Weaver on 10/26/2015 05:32 AM
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In a far reaching ruling, the European Court of Justice (ECJ) has ruled that Bitcoin transactions are not subject to value-added tax (VAT).
Simply put the court ruled that âtransactions to exchange a traditional currency for the âBitcoin' virtual currency or vice versaâ are not subject to VAT.
Simon Dixon, CEO of bnktothefuture.com, said: It's very good news. If you were taxed on the exchange it would make it an inferior currency to other currencies, so the implications of it being treated as a currency are that it can free flow.â
Specifically, the court said that to deprive Bitcoin exchanges from the tax exemptions given to traditional exchanges âwould deprive it of part of its effects." In other words, the aim of the exemption is to oppose âthe difficulties connected with determining the taxable amount and the amount of VAT deductibleâ in cases of taxation of financial transactions."
Source: SCMagazine
Simply put the court ruled that âtransactions to exchange a traditional currency for the âBitcoin' virtual currency or vice versaâ are not subject to VAT.Simon Dixon, CEO of bnktothefuture.com, said: It's very good news. If you were taxed on the exchange it would make it an inferior currency to other currencies, so the implications of it being treated as a currency are that it can free flow.â
Specifically, the court said that to deprive Bitcoin exchanges from the tax exemptions given to traditional exchanges âwould deprive it of part of its effects." In other words, the aim of the exemption is to oppose âthe difficulties connected with determining the taxable amount and the amount of VAT deductibleâ in cases of taxation of financial transactions."
Source: SCMagazine
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