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Bitcoin Exempt From VAT Says European Court of Justice
An anonymous reader writes: The European Court of Justice (ECJ) proposes that Bitcoin should be exempt from Value Added Tax (VAT). This news has been positively received by the Bitcoin community in the EU, as member states are not likely going to apply VAT to purchases and sales of Bitcoin. A clear cut argument brought up by Advocate General Juliane Kokott, was that VAT is commonly applied to goods and services which have an end consumer. Bitcoin is neither a good, nor a service and has no end consumer, as Bitcoins are eternally transferable just like normal currency. Bitcoin exchanges such as Coinbase, Kraken, Bitstamp, and Bitfinex will all benefit from this ruling, which may lead to other countries across the globe to follow a similar approach.
Bitcoin is a cool thing in theory, but when can I exchange it for money that shops actually accept, so I can do my groceries with it?
Always read at -1, don't let others decide what you should and should not read.
The bitcoin fundamentals are economically and technologically flawed. Other than that though... Yay!
If it ain't broke, don't fix it.
The point being that bitcoin is simply not recognised by court as a valid currency. VAT is about paying in currency.
And mind you, only idiots paint "Europeans" as some kind of a monoculture. We have Greek who openly say that the only way they will pay taxes is through foreign oppression and then you have people who think that paying taxes is a great way to fund wide reaching social security for everyone.
It's not a rationalisation. It's fact. There is no VAT in barter.
You'd just end up getting taxed twice then, first when you convert to Euros and then when you use those Euros to buy something else which is subject to VAT. If the business accepts Bitcoins or some other digital currency as a valid form of payment for goods which are typically taxed, then I suspect that VAT would be collected at that time.
This news has been positively received by the Bitcoin community in the EU? Europeans and their fanbios never hesitate to point out that they like paying taxes because they love all their public services. I would have thought they would welcome a nice fat VAT charge on their Bitcoin exchanges.
I know you're trolling but don't worry instead of VAT we get to pay capital gains tax like on other investment vehicles like savings accounts, stocks and bonds. And wealth tax too, if you declare it as you're legally obligated to if it's over a certain amount. If you're making money, you can be sure the government knows to get a piece of the action. The IRS does too, but on this side of the pond we occasionally see useful public services in return.
Live today, because you never know what tomorrow brings
What are you talking about? Your statement is the opposite of what happened.
The court basically said "Yeah, that's basically like money" - meaning it's not a product itself but can be used to acquire other products. *Those* products are still subjected to VAT, as should be, but bitcoin itself isn't.
I think the idea is to search the web for bitcoin gift card (let me duck that for you) and then cash in your Bitcoins for credit at your favorite stores.
Bitcoin is STILL a thing? There's STILL idiots out there who thinks it has any value and willing to pay for it?
Wow... Just... Wow.
Yes, it still has value. Even more so now that the craze has died down. It is used more and more like a currency rather than for speculation.
The primary goal of bitcoin it to promote trade without central authority. It makes transacting globally very easy for very minimal transaction costs. Bitcoin does much good for the unbanked and poor, so it may be slow adoption., but in many 3rd world countries with unstable national currencies, it has done wonders.
Being a spelling & grammar Nazi is a sign you do not poses the intelligence to contribute to the conversation
Purchasing gold bullion doesn't require paying VAT either:
https://en.wikipedia.org/wiki/...
So it makes sense to do the same for Bitcoin.
> It is used more and more like a currency rather than for speculation.
I know some places say they accept Bitcoin as a payment method. However most of them quickly convert it to dollars or another currency. Is there a demand from users to be able to pay in Bitcoin instead of their regular currency? I can understand that need when buying things where privacy is really needed (illegal drugs etc.), but for regular stuff?
No, but it has to surrender its own information to the government for taxation purposes.
Much of raison d'etre for bitcoin is gone if seller is not anonymous.
That would be because you cannot use gold as a direct payment currency any more easily than any other trade goods. It's a trade good, and trade for gold would be barter.
You could pay with gold after you denominate it in a currency for its value just like with any similar item (i.e. oil, platinum, diamonds), but that raises all kinds of questions about the denomination, its values, and potential for taxation and regulation.
But the specific tax known as VAT is only added when goods and services are sold to a consumer. That is why VAT typically varies depending on the type of good or service being sold.
Sorry, but I had to reply to your footer: "Being a spelling & grammar Nazi is a sign you do not poses the intelligence to contribute to the conversation" Wut? Being good at a language and pointing out errors in your mind makes us (me) not simply pedantic, but in fact less intelligent than the people making the errors of language in the discussion? This makes no sense to me!
Any non-under-the-table sales over a certain amount must identify both parties, in many jurisdictions. Small purchases don't require that.
This ruling has no impact on anonymity: If something was to be kept off the radar, it sure as hell wouldn't be bothered with taxes and government bureaucracy. If it's just something small that should be kept quiet, nobody bothers or is forced to collect information about the buyer.
However most of them quickly convert it to dollars or another currency.
The important thing is they accept it for trade, Not that they choose BTC as a long-term store of value. Surely anyone can see how that could create undesirable risk.
Merchants might accept BTC, but most of their suppliers, including employees and the tax man are going to want their payments denominated in local currency.
If you can follow the discussion, do you really need to critique others spelling? It is beyond rude. What did it contribute to the conversation? It is one of those pet peeves of mine, and back when this site had traffic, it always bothered me, now that it is clinging on for dear life, it's just fun troll bait.
Being a spelling & grammar Nazi is a sign you do not poses the intelligence to contribute to the conversation
As far as I read things it is the _exchange_ of bitcoin that is exempt from VAT, not buying products. Also, it is not yet decided in EU, but the attorney general has give a preliminary decision, which is likely to be the final.
It's treated in the same way as gift cards. You don't pay VAT on them, because they're not a good in their own right, they're just a placeholder for money. When people then redeem them for goods or services, then you pay VAT at the prevailing rate on the value of the goods in whatever the currency of the local tax authority is.
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Except it does not apply to currencies, because as the name says it is value ADDED tax. What is exactly taxed is the amount that was added from buying to selling the good. For example a shop buys chocolate for 0.5 a price and sells it for 1. The shop will then pay the VAT on the 0.5 that was added. As a consumer you don't see this, because you pay the VAT for each step and originally the value stared with 0. This is complicated by the technicality that the bulk of the VAT is actually payed by the store selling to the consumer, but they are just routing the taxes of others, since they got their products VAT exempt.
But that is not true to currencies. For example if I "buy" USD for EUR, no value was added. Although the exchanges take a fee (which may contain VAT), but the value only converted. This is the same for gold and in some areas silver coins for example, since they are considered a currency. The assertion that BTC is a currency and value is only converted, not added, is totally correct.
Maybe, but that's not what your sig says at all, and your reply bears no resemblance at all to my reply... You say 'Intelligence' yet explain it's about rudeness...
but in many 3rd world countries with unstable national currencies, it has done wonders.
Citation required. Given its very low volume, I am go out on a limb and say no. It has done literally almost nothing.
The Grey Goo disaster happened 3 billion years ago. This rock is covered in self replicating machines!
No, but it has to surrender its own information to the government for taxation purposes.
Much of raison d'etre for bitcoin is gone if seller is not anonymous.
Bitcoin was not designed for selling drugs, and protecting that is not a goal in itself, plus drug dealers are already breaking the law which is why they want to hide there ID, they can break VAT laws too.
Except for VAT payment, which requires buyer to identify himself and pay the tax. Welcome to real world. Especially in current climate in EU, where tax dodging caused a significant tightening of enforcement of tax code across many jurisdictions.
Previous post should read "seller" obviously.
Remember what they got Al Capone for?
Yeah.
Of course the seller has to identify himself. The people selling stuff and seriously thinking about paying taxes are not the same people who'd rather not show up on the government's radar.
As I said, nothing changes, other than bitcoin being grouped with real currencies and not products.