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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.
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.
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
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.
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.
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.