In a historic ruling, The European Union’s Court of Justice has said that the Bitcoin exchanges that transfer conventional currencies such as Euros or Swedish Krona into Bitcoin are exempt from value-added taxes.
The story behind the ruling is pretty interesting as well! A Swedish national David Hedqvist applied for operating his online Bitcoin exchange. However, the application ran into trouble after the Swedish Tax Authority declared that VAT (Value-Added Tax) will be imposed on Bitcoin even when The Swedish Revenue Law Commission had classified it as VAT-exempt.
The ruling effectively means that “Bitcoin is a currency, not a commodity.”
The court said,
“Transactions to exchange traditional currencies for units of the Bitcoin virtual currency (and vice versa) constitute the supply of services” under the bloc’s law “since they consist of the exchange of different means of payment. As such they are exempt from value-added taxes.”
The court also said that this was due to EU’s own regulations that bar such taxes on transfers of “currency, bank notes and coins used as legal tender.”
This ruling will certainly help in building a consensus in future over the treatment of Bitcoin.
Richard Asquith, Vice President at tax compliance firm Avalara who welcomed the ruling and called it “the first step in securing Bitcoin’s future as a genuine alternative to national currencies.”
The good news has already taken the market by the storm and the bulls are on rampage mode, crushing the bears and catapulting the price to a fresh 10-week high of $276 (at the time of writing this report). See the chart below:
And the momentum is only going strong by the minute! We may even see Bitcoin scaling $280-290 on the back of this positive development.
The story behind the ruling is pretty interesting as well! A Swedish national David Hedqvist applied for operating his online Bitcoin exchange. However, the application ran into trouble after the […]