[Rushtalk] EU court rules conversion to Bitcoin not subject to sales tax

Carl Spitzer lynux at keepandbeararms.com
Fri Oct 30 08:11:52 MDT 2015


EU court rules conversion to Bitcoin not subject to sales tax
Thursday 22 October 2015 at 1:19 PM ET by Ashley Hogan 
Bitcoin
©  WikiMedia (computer network participants and communities.)
[JURIST] The Court of Justice of the European Union [official website]
ruled [judgment] Thursday that converting cash into Bitcoin [corporate
website], a virtual currency that is used online and over the Internet,
should be exempt from value added tax (VAT) [Swedish government
backgrounder] within the 28-country bloc. The court found that the
conversion should not be charged a sales tax because the transaction
involves "the exchange of different means of payment" and does not fall
under the VAT directive. Simon Dixon, CEO of Bnktothefuture.com
expressed [Bloomberg report] his approval of the decision saying Bitcoin
will now be treated as another form of currency. 

The creation and use of digital currencies has been a contentious issue
across the globe. The virtual currencies, which exist only in electronic
format, are generated and stored via computer and traded among holders
for goods and services. In 2014 Tokyo-based digital currency exchange
Mt. Gox [corporate website, in Japanese] collapsed after announcing the
loss of more than USD $500 million worth of bitcoins to hackers. The
loss marked the impetus [WSJ report] for federal investigators to
closely examine digital currencies, which remain largely unregulated by
US and international banking and currency laws. The popularity of
digital currencies stems from the fact that they can be transferred
anonymously, unlike most hard currencies created by governments. Former
US Attorney General Eric Holder expressed concern [JURIST report] in
April 2014 before the US House of Representatives Judiciary Committee
with respect to the proliferation of virtual currencies [CNBC
backgrounder], which, he asserts, have created new avenues for money
laundering, drug trafficking and other illegal activity. 





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