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