Top EU court rules Bitcoin exchange tax-free in Europe
The EU's top court ruled Thursday that the exchange of Bitcoin and other virtual currencies should be treated just like traditional money in Europe and not incur any sales tax.
22.10.2015
(AFP) The EU's top court ruled Thursday that the exchange of
Bitcoin and other virtual currencies should be treated just like
traditional money in Europe and not incur any sales tax.
According to European Union law, all transactions relating
to currency, bank notes and coins used as legal tender across the
28-nation bloc are exempt from value-added tax (VAT).
In court, Swedish authorities argued that because it was
not a real currency, Bitcoin did not meet the EU's tax free standard.
But the Luxembourg-based European Court of Justice disagreed.
"The court... holds that those transactions are exempt from
VAT under the provision concerning transactions relating to 'currency,
bank notes and coins used as legal tender'," it said in a statement.
Critics underline volatility and lack of legal framework
The decision will be welcomed by Bitcoin's backers who say
virtual currencies provide an efficient and anonymous way to store and
transfer funds online.
But critics argue that the lack of a legal framework
governing the currency, the opaque way it is traded and its volatility
make it dangerous.
Unlike a real-world currency such as the US dollar or the
euro, Bitcoin has no central bank and is not backed by any government.
Bitcoin's initial success has since met with a number of highly-publicised setbacks.
One of Bitcoin's biggest exchanges, the Tokyo-based MtGox,
shuttered last year after admitting 850,000 coins, worth $480 million
at the time, had disappeared from its digital vaults.
Bitcoin's reputation was also damaged when US authorities
seized funds as part of an investigation into the online black market
Silk Road.