European Union to Rule on Bitcoin VAT Today
Getting Bitcoin in the EU could change irrevocably today as the European Court of Justice Advocate General decides on whether to charge value-added tax on the sale of bitcoins or not.
While some individual countries such as the United Kingdom have already implemented a strategy regarding Bitcoin , exempting it from VAT and treating it as a foreign currency, the whole EU is subject to the rules being decided on today. The UK also permits businesses to accept any currency they like, although their VAT must be calculated properly in the local, national currency. In this scenario, rather than charge an extra fee when the Bitcoin is acquired, the government gets its share when the money is spent .
One of the competitive advantages of Bitcoin is the lower cost of remittance, an advantage that could be revoked today with the slam of a gavel. The case was kicked off when a Swedish entrepreneur, David Hedqvist, started looking into opening a Bitcoin exchange a few years ago and found the rules confusing. When he inquired with the Swedish government as to whether his customers would be paying VAT on transactions, they responded that they would not, but then another body of the Swedish government decided that this needed further clarification with the EU.
Hedqvist is the operator of Bitcoin.se , a Swedish Bitcoin information site. He goes to court today with the aid of lawyers provided by several European Bitcoin companies. Today’s events could influence the future of Bitcoin in Europe for the much worse, in the case that enthusiasts have a new barrier to entry, or for the much better, in the sense that exchanges now have a clear ruling on VAT. CCN.com will follow the story.
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