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

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 …

  1. badger31

    Spork

    This seems to accept bitcoin as a commodity/currency rather than an product/service.

  2. Tom 38

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

    Except in tax regimes that treat movable assets differently, like Luxembourg and Germany. Hold bitcoins for 6-12 months, depending on location, and sell with no CGT liability.

    1. ZSn

      Assuming that your bitcoins haven't gone down in value. Recently the value is up and down like a bride's nightie.

  3. Doctor Tarr

    On the up

    They will skyrocket now! Everyone, buy in quick........

    (not that i have a vested interest or anything /ahem)

  4. Doctor Tarr

    Mining

    What happens if I have mined the coins (not practical for me with Bitcoin but it is for other alt coins)? When I sell them VAT should be due because the creation is not a financial transaction (although I hope it isn't). As a business I would be able claim VAT back on the equipment and power used to create them.

    Also, whilst VAT is not applicable on the principal amount, e.g. 1BTC (about £178), if I was charged a transaction fee on top then this may be subject to VAT. This 'transaction fee' may not be obvious because I could sell my 1BTC @ £180, for example.

  5. Your alien overlord - fear me

    Jersey has just launched itself as a Bitcoin centre of excellence or some such rubbish. However everything is charged VAT/GST. Wonder how they're going to get along taxing everyone 5% per transaction when the rest of the world doesn't? On the plus side, no CGT (yet).

  6. MyffyW Silver badge

    But I have to pay VAT on my Tulip bulbs!

  7. Old Handle

    That seems logical on the face of it. It's a "Value-Added Tax", right? So if you're just buying and selling something without changing it treating any profit as capital gains makes more sense. Though Doctor Tarr raised some good points.

    1. jonathanb Silver badge

      If you operate an exchange, then the profit on your bid/offer spread would be subject to income tax, not capital gains tax.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like