EU Rules Bitcoin Is a Currency, Exchanges Are VAT-Exempt (thestack.com) 75
An anonymous reader writes with this snippet from The Stack: The European Union's Court of Justice (ECJ) has today ruled that Bitcoin is a currency, detailing exchanges that transfer traditional currencies into the crypto-coins for a fee are to be exempt from consumption taxes. Under the EU rule against value added taxes (VAT) on transfers of "currency, bank notes and coins used as legal tender," the new call presents an important boost for Bitcoin, erasing related costs for buying and using the virtual funds in Europe – one of the world's leading trading zones.
That decision overrides other approaches previously taken by some of the member countries, which treated Bitcoin like an exchangeble commodity itself, rather than a medium of exchange.
Does VAT applies to Gold? (Score:3)
Re:Does VAT applies to Gold? (Score:5, Informative)
According to this Wikipedia article, the EU countries have exempted Gold purchases from VAT
https://en.wikipedia.org/wiki/Taxation_of_precious_metals
I can confirm this for Germany, at least.
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In the UK some gold (sovereigns and gold britannias) count as currency, and so are exempt from capital gains tax, too.
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Wait, you're telling me that profits from currency exchanges aren't considered capital gains? Yikes, no glaring obvious taxation holes there.... nope.
Re: Does VAT applies to Gold? (Score:1)
Actually, the 1 oz gold Britannia IS legal tender and has a face value of £100. Of course, you'd have to be insane to spend one at that price...
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Regardless, that would only apply to the *coin* version of bitcoin - these gadgets that are coins with tamper-evident sticker with a btc wallet data contained within.
It would be very weird if purely electronic currency was covered by noble metal items trade laws.
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You do realize that, for purposes of international buying and selling ... gold and pretty much every other version of currency are essentially purely electronic?
I'm pretty sure if someone buys gold on the market, they'll never see it or lay hands on it. Nobody is shipping around stack of bills to people buying currency.
So, if I can buy and sell gold, Euros, or Dollars in purely electronic form, WTF is the difference with Bitcoin?
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Currently 14.75 million bitcoins have been issued, with 25 more every 10 minutes on average as new blocks are added to the block chain. The 25 coins are the incentive for "miners" to solve new blocks, and thus update the transaction history. The incentive falls in half every ~4 years, so the total issuance approaches 21 million asymptotically.
In the past 30 days 2 million bitcoins have traded on exchanges that charge fees. There are some Chinese exchanges that have zero fee trading, but their volume is t
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The difference is that you can (and a lot of people do) request your gold bars to be delivered to a specific shipping address, and make them into jewelry, electronics or medicines. Or even plate your Ferrari.
Gold has tangible value of a metal with legit technical and artistic uses. Law always treats it as commodity, not currency.
Even dollars would be more 'commodity' than bitcoin: you can get a big bag of pennies, drill holes in the middle and use them as washers for nails of your roofing. There is absolute
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Because it's primarily collector / novelty item and only coincidentally carries monetary value.
You don't get the physical bitcoins to pay for wares, but to keep it in display case. And you pay more than 1BTC for it.
But! (Score:1, Interesting)
But according to the average Slashdotter, bitcoin is a Ponzi scheme! How is it possible that governments are taking it seriously and major companies are using BitCoin? Could the average Slashdotter be wrong? Unpossible!
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Both are correct. Bitcoin is a Ponzi scheme. And the average Slashdotter is generally wrong.
Only double because single. (Score:3)
The coin dealer charges fee, service fee, etc are taxable, so you're paying for the coin, for the service, and tax on the service.
OTOH you can just pay for a hot-dog with a silver coin, and there would be no tax (other than normal sales tax).
I believe even the seller could give you the silver dollar as change for said hot-dog and no tax on that would appear (only on the hot-dog purchase).
It all changes though, if you want to charge $10 for a $1 coin... in this case it's not a currency exchange, it's an item
Still not legal tender (Score:4, Informative)
Just a note to clarify that this ruling does not make Bitcoin legal tender in the EU, as the rule simply applies to any currency which is deemed or defacto used as legal tender somewhere.
Its the EU financial law equivalent to the Full Faith and Credit Clause of the US Constitution - someone elses currency is not taxed any more than yours is.
Re:Still not legal tender (Score:5, Informative)
ust a note to clarify that this ruling does not make Bitcoin legal tender in the EU
Legal tender is a very strange thing. The largest legal tender amount in Scotland is the two pound coin. Neither Scottish bank notes or Bank of England bank notes are legal tender in Scotland.
Legal tender has a rather peculiar and specific meaning and covers not only the currency but the specific form of currency as well as the amount. For example, there's some limit (not sure. A pound?) above which copper coins cease to become legal tender in England (maybe the whole UK).
Legal tender is a rather specific thing in that a creditor cannot refuse repayment of a debt if paid in legal tender. They can accept repayment in things other than legal tender but they're not obliged to.
This means that creditors can't take the piss by refusing to accept 20 pound notes (in England, tough luck Scots!), and debtors can't take the piss by insisting on repaying a grand in coppers.
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Sorry, but I have absolutely NO idea what you're trying to say here. Are you saying creditors/debtors will get angry or "pissed off" about refusing to accept 20 pound notes or something? That doesn't make sense to me....?
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Are you saying creditors/debtors will get angry or "pissed off" about refusing to accept 20 pound notes or something?
I'm not sure why you wrote "pissed off". It's different from taking the piss.
If you owe someone money and they refuse to accept common forms of it, that's going to annoy you. It's in fact illegal for them to refuse precisely to stop people annoying each other by trying to put stupid conditions on repayment or to repay in the stupidest way possible.
If you have a debtors, you are legally oblige
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I don't understand "taking the piss" in your context? It sounds like you're wanting to urinate on him? Taking a piss is generally meant to go urinate, take a leak..etc?
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This website may help you to understand:
http://www.google.com/ [google.com]
go there and type in "taking the piss".
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If you are in debt for £10,000, the creditor can't refuse repayment if you turn up with a bundle of £20 notes. That cash is legal tender for repaying any debt, so the creditor can't demand a cheque instead, or gold. They must accept cash.
There are exceptions for low-value coins, in the UK. The creditor is allowed to refuse to accept a truckload of 1p coins (1,000,000 coins), or 100,000 10p coins. Creditors must accept low-value coins for debts up to £10 (depending on the coin), but for la
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Creditors must accept low-value coins for debts up to -L-10 (depending on the coin), but for larger debts can demand -L-1 or -L-2 coins (high value coins) or paper money.
Things to do when one is very rich #2473:
Get a 1 million pound debt from some organisation you hate and repay it in pound coins.
That's 10 metric tons of legal tender, motherfuckers!
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"Take the piss" is a British slang term that means roughly the same thing as when we say "give someone shit".
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Pissed = drunk
Pissed off = angry
Taking the piss = a form of mockery
Piss-proud = unwarranted pride
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Ok..I've heard of ONE of those before..Pissed Off.
Where do they use these other terms?
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Uhm, in English speaking countries :)
They are perhaps mostly used in England, and e.g. "piss-proud" is going out of common use, while "pissed" in the colonies have become synonymous with "angry".
Regarding "taking the piss," you may instead have encountered the version "taking the mickey," which is cockney-slang (Mickey Bliss => piss) for the same.
There are plenty more urinary expressions, but I'll leave discovering them as an exercise to the readers :)
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In France, the French government no longer accept euros. For instance you can only pay the first €300 of your council tax bill in cash but generally all payments now have to be in electronic form.
Phillip.
What were Bitcoins for again? (Score:2)
Be careful what you wish for. This will help open the way to a host of banking type regulations, especially about transparency and reporting.
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Now, will there be further consequences (Score:2)
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Most major bitcoin exchanges already comply with AML/KYC, and require some form of ID to prevent fraud.
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Prevent fraud? With the number of exchanges going belly up and their coins on deposit purloined by who knows who, their efforts to prevent fraud don't seem to be working all that well.
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That's the first thing I thought of, too. It looks like the new EU regulations are very similar to the US's regulations. People are going to cheer this ruling, thinking it brings legitimacy to bitcoins. I think it's going to destroy bitcoin's biggest advantage- anonymity.
"The rules will also have to be complied with by any other kinds of businesses involved in making or receiving cash payments for goods worth at least €10,000, regardless of whether payment is made in a single, or via a series of lin
the ruling itself (Score:2, Informative)
http://curia.europa.eu/juris/document/document.jsf?text&docid=170305&pageIndex=0&doclang=en&mode=lst&dir&occ=first&part=1&cid=755724
reference:
JUDGMENT OF THE COURT (Fifth Chamber)
22 October 2015 (*)
(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Articles 2(1)(c) and 135(1)(d) to (f) — Services for consideration — Transactions to exchange the ‘bitcoin’ virtual currency for traditio
Fiat currency (Score:1)
Not a bitcoin hater/lover, but I remember lots of loud voices here on Slashdot against fiat currencies.
Isn't bitcoin the most extreme of fiat currencies? A number with no physical value at all, not even worth the paper it's written on since it's not written at all.
At least, it's not centralized and barely regulated. For now. But let me know if I missed something.
Re:Fiat currency (Score:5, Informative)
Isn't bitcoin the most extreme of fiat currencies? A number with no physical value at all, not even worth the paper it's written on since it's not written at all.
I think you're using the term "fiat currency" as the opposite of gold and other commodities that have been used as money. According to Wikipedia [wikipedia.org] and confirmed by various other online sources, fiat currency is any currency backed and regulated by government. Bitcoin is obviously not gold, but neither is it fiat money since its value isn't regulated nor directly influenced by any central government authority. The value of Bitcoin can of course still be manipulated by market forces or external events, such as a government ban on cryptocurrencies, but this is true of commodities as well.
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However, if your definition of a fiat currency is simply "a currency not backed by a physical object" then you're partially / perhaps correct that bitcoin is a fiat currency. It all depends on how you define the value of solving hashes. Such solutions are obviously not gold, silver, diamonds, tea or some other such physical object. But neither is the value simply changed at the whim of a
It doesn't matter (Score:1)
The gov't might as well waste their time regulating Beanie Baby bartering. Bitcoin is incapable of growth. 7 tps max? Massive cost of easily disrupted network support? Same regulations as anything else when exchanging for currency?
Yet we keep seeing these posts as if Bitcoin has any real significance.
The more pertinent question for Europe is (Score:1)
How Bitcoin is regulated under Sharia law, since that's what we'll have here in one or two generations.
Re:The more pertinent question for Europe is (Score:4, Funny)
Sorry, this is Slashdot. You want the Daily Mail comments section. Go back down there, turn right at Fox News and its the fourth website on the right.
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You forgot the "straight on til morning" part....
By the way, I think you turned the wrong way at Fox....
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People save it, so there is never enough in circulation to be of any use causing a paradox of thrift.
It's a question of balance. If you have no food and a ton of BTC, you'll probably exchange some to stay alive.
Currently (pun intended), Bitcoin is used by relatively few people, and its unit value is expected to increase, as its total amount represents more and more real-world value. Thus people save disproportionate amounts of it as an investment. At some point there might be a balance as the adoption curve flattens out, and the investment aspect will be less attractive, so people will use it like any c
Libertarian's heads exploding yet? (Score:2, Troll)
Must cause some major cognitive dissonances that the "socialist" EU allows for more economic freedom that the US.
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How's this court decision differ from how Bitcoin is treated in the USA?
Best I can tell, in both the EU and the USA, Bitcoin is treated as a way to exchange value. You "buy" them in exchange for money, goods or services, then at a later time exchange them for money, goods or services. About all that differs is what kinds of transactions create a taxable or legally reportable event....
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The USA has rules that bit coin is a commodity, and therefor is not excemnt from VAT tax.
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What AC said :-)