Published On: Thu, Oct 22nd, 2015

Bitcoin Exchange Transactions Now Tax Free In Europe

Bitcoin Network

The crypto-currency can now be traded with the same tax implications as mainstream currency.

Following a new ruling from the highest court in Europe, bitcoin and other virtual currencies can be exchanged without VAT (value added tax) in the European Union.

The ruling puts bitcoin on a similar level to mainstream money after Swedish national David Hedqvist who set up a curency exchange service of money for bitcoin and vice versa took the case to the EU Court of Justice. The court stated that VAT, a form of sales tax, should not be placed on the transactions because the business involves “the exchange of different means of payment.”

After the hearing Hedqvist said “I always felt like this was the only sensible decision… It is important for businesses all over Europe that they finally have clear guidance regarding VAT and for some this could mean that they will get money back from the tax office.”

Bitcoin is a virtual currency which allows users to trade online credits for goods and services. The currency has no central issuing authority and uses a public ledger to verify encrypted transactions. The currency can be created online by using a computer to complete difficult tasks, a process called mining.

Bitcoin has in recent years gained traction with online retailers as a method of payment however adoption of the currency in criminal transactions is believed to be widespread due to the anonymity of the currency. The price of bitcoin saw a slight rise after the news, an increase of roughly 3 percent, during Thursdays’ session.

Receive News & Ratings Via Email

Enter your email address below to get the latest news and analysts' ratings for your stocks with MarketBeat's FREE daily email newsletter: