nav search
Data Center Software Security Transformation DevOps Business Personal Tech Science Emergent Tech Bootnotes BOFH

No VAT on Bitcoin, rules ECJ, but capital gains still apply

Rebate time for exchanges leaves crypto-currency nerds salivating

By Alexander J Martin, 22 Oct 2015

Transactions of and for Bitcoin are not subject to value-added tax (VAT) the European Court of Justice (ECJ) has ruled today.

A judgment delivered by the ECJ today stated that "transactions to exchange a traditional currency for the 'Bitcoin' virtual currency or vice versa" are not subject to VAT.

The case arose due to a dispute between David Hedqvist, who sells Bitcoin on his website, and the Swedish tax authority, the Skatteverket, which disagreed with a Swedish court's ruling that Bitcoin exchanges were exempt from VAT.

In Luxembourg today, the European Union's highest court settled the matter, stating that virtual currency exchanges would be considered as a means of payment and were thus exempt from VAT.

One of the cryptocurrency's enthusiasts on Reddit rather excitedly asked: "Does this mean no capital gains tax when it goes to the moon? If this is true, then it's basically a tax-free investment now."

The Register can state that the judgment in Case C‑264/14 does not remove Bitcoin barons' liability to Capital Gains Tax. ®

The Register - Independent news and views for the tech community. Part of Situation Publishing