After the arrival of the first ever Bitcoin ATM in Austria, expectations are higher about the expansion of the digital currency in the country. However, as the two ministers e.g. the federal minister for finance and vice chancellor, Michael Spindelegger and The federal minister for science, research and economy, Reinhold Mitterlehner contradict each other, the picture is blurred.
Answering parliamentary questions submitted by a member of the legislature, Michael Spindelegger said that Bitcoin is not a financial instrument i.e. a tradable asset. Thus, he echoed the position of the country’s markets regulator i.e. the Financial Market Authority which shares similar opinion about the digital currency.
How to Tax Bitcoin Also ambiguous
While answering the question from a fellow parliamentarian the finance minister of Austria also gave guidance on how capital gains taxes from Bitcoin investments would be applied. He clarified that individuals who sell Bitcoin holdings within a year of purchasing them would be subject to capital gains tax (CGT).
However, according to him if the digital currency assets are held beyond a year, proceeds from a sale are not subject to CGT. He said that the government will set accounting rules for businesses dealing in Bitcoin and anyone dealing with digital currency will have to declare them as either fixed assets or working capital.
Whereas the finance minister classed Bitcoin mining as a kind of ‘industrial’ activity, the federal minister for science, research and economy, Reinhold Mitterlehner contradicts him and says that Bitcoin should not be treated as a financial instrument. He referred to a German policy wherein it recognizes Bitcoin as a ‘unit of account.’
Ambiguity Poses Risk for Operators of Bitcoin ATMs
Thus, it looks there is no consensus in the government on how to treat Bitcoin when taxing it and the two contradictory statements from the two cabinet ministers in Austria is an ample proof for this. Nonetheless, as the two ministries contradict each other, there is no clarity on how to interpret the guidance issued by the government.
Ambiguity is not just on how to treat Bitcoin but also on Bitcoin and VAT as according to the guidance by the government how companies dealing Bitcoin should have Austria’s VAT of 20% applied to transactions is still not clear. The critics believe that the ambiguity if persists could pose a risk for operators of Bitcoin ATMs in the country.
To contact the reporter of this story: Deepak Tiwari at email@example.com
Click here to view full article