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EU Rules Bitcoin Is a Currency, Exchanges Are VAT-Exempt (thestack.com)
An anonymous reader writes with this snippet from The Stack: The European Union's Court of Justice (ECJ) has today ruled that Bitcoin is a currency, detailing exchanges that transfer traditional currencies into the crypto-coins for a fee are to be exempt from consumption taxes. Under the EU rule against value added taxes (VAT) on transfers of "currency, bank notes and coins used as legal tender," the new call presents an important boost for Bitcoin, erasing related costs for buying and using the virtual funds in Europe – one of the world's leading trading zones.
That decision overrides other approaches previously taken by some of the member countries, which treated Bitcoin like an exchangeble commodity itself, rather than a medium of exchange.
If gold bullion is still subject to VAT, exempting bitcoins would not be correct. If it is America the Gold Merchants Trade Association (if !exist create()) will sue to get the same exemption.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
But according to the average Slashdotter, bitcoin is a Ponzi scheme! How is it possible that governments are taking it seriously and major companies are using BitCoin? Could the average Slashdotter be wrong? Unpossible!
Just a note to clarify that this ruling does not make Bitcoin legal tender in the EU, as the rule simply applies to any currency which is deemed or defacto used as legal tender somewhere.
Its the EU financial law equivalent to the Full Faith and Credit Clause of the US Constitution - someone elses currency is not taxed any more than yours is.
The coin dealer charges fee, service fee, etc are taxable, so you're paying for the coin, for the service, and tax on the service.
OTOH you can just pay for a hot-dog with a silver coin, and there would be no tax (other than normal sales tax).
I believe even the seller could give you the silver dollar as change for said hot-dog and no tax on that would appear (only on the hot-dog purchase).
It all changes though, if you want to charge $10 for a $1 coin... in this case it's not a currency exchange, it's an item trade.
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Be careful what you wish for. This will help open the way to a host of banking type regulations, especially about transparency and reporting.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
If it has been declared a currency, then could that then trigger the same requirements for when trading in traditional currencies .... with anti money laundering requirements, proof of ID etc. Without looking at the details, I can see how this could well follow
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http://curia.europa.eu/juris/document/document.jsf?text&docid=170305&pageIndex=0&doclang=en&mode=lst&dir&occ=first&part=1&cid=755724
reference:
JUDGMENT OF THE COURT (Fifth Chamber)
22 October 2015 (*)
(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Articles 2(1)(c) and 135(1)(d) to (f) — Services for consideration — Transactions to exchange the ‘bitcoin’ virtual currency for traditional currencies — Exemption)
In Case C264/14,
REQUEST for a preliminary ruling under Article 267 TFEU, from the Högsta förvaltningsdomstolen (Supreme Administrative Court, Sweden), made by decision of 27 May 2014, received at the Court on 2 June 2014, in the proceedings
Skatteverket
v
David Hedqvist
How Bitcoin is regulated under Sharia law, since that's what we'll have here in one or two generations.
Isn't bitcoin the most extreme of fiat currencies? A number with no physical value at all, not even worth the paper it's written on since it's not written at all.
I think you're using the term "fiat currency" as the opposite of gold and other commodities that have been used as money. According to Wikipedia and confirmed by various other online sources, fiat currency is any currency backed and regulated by government. Bitcoin is obviously not gold, but neither is it fiat money since its value isn't regulated nor directly influenced by any central government authority. The value of Bitcoin can of course still be manipulated by market forces or external events, such as a government ban on cryptocurrencies, but this is true of commodities as well.
You did in the sense that it is not sponsored by a government and required legal tender in a particular jurisdiction.
However, if your definition of a fiat currency is simply "a currency not backed by a physical object" then you're partially / perhaps correct that bitcoin is a fiat currency. It all depends on how you define the value of solving hashes. Such solutions are obviously not gold, silver, diamonds, tea or some other such physical object. But neither is the value simply changed at the whim of a government bureaucrat. This is where the line becomes blurred.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
Must cause some major cognitive dissonances that the "socialist" EU allows for more economic freedom that the US.