Virtual currencies can be exchanged tax-free in Europe after court ruling | Hacker News Reader

Virtual currencies can be exchanged tax-free in Europe after court ruling

cnbc.com

100 pointseduardoveiga20 comments

This is a horrible headline and directly promotes misunderstanding. One might even call it clickbait.

In reality, virtual currencies can now be exchanged tax-free, effectively putting them in-line with other currencies—no special status has been afforded specifically to Bitcoin that makes it some kind of tax shelter or similar. Capital gains and taxes while spending Bitcoins or real goods and services still apply as with any currency.

Agreed on the headline, but more to the point is that now the EU does not draw a distinction between virtual and traditional currencies. Or this is at least a step in that direction.

> the EU does not draw a distinction between virtual and traditional currencies.

This should be the headline...

I don't like this nomenclature. Can we call them "state-sponsored" and "stateless" instead? Almost all of the world's currency is as virtual as email.

Maybe "bank-issued" currency is more accurate for the more traditional kind?

Headline is indeed horrible, but there's some merit to the news. There could've been many other tax implications with Bitcoin and the article exposes that's not the case.

Ok, we changed the headline and can change it again if anyone suggests a better (more accurate and neutral) one.

Can we change the headline to "sales tax-free" instead of tax-free which indicates something rather different.

Europe has no sales tax. Just VAT.

Yes, Europe has no conventional sales tax, but VAT is a tax on sales, to be sure.

https://en.wikipedia.org/wiki/Sales_tax

I'd like it to read something to the effect of: EU takes step to treat virtual currencies as currency rather than a commodity.

Does this mean that Bitcoin has a different tax status in the EU vs the US? If so, does this suggest future bitcoin growth will be favored in one or the other?

No, this ruling is in line with how the US does it. Before, it was unclear whether the EU would charge sales tax (VAT) when you buy bitcoins on an exchange. Now it's clear that they won't. The US has never charged sales tax on bitcoin exchanges.

Tax-free is an exaggeration, as bitcoin is still subject to capital gains tax, and of course you'll have to pay sales tax/VAT if you use bitcoin to buy things, just as if you bought the same things with euros or dollars.

Wait... then, what _IS_ tax-free about it?

If I still have to pay capital gains tax and sales tax on it, then what's different about taxes in regards to bitcoin vs. government currency?

Buying it, because now it's treated as an exchange of currency. There is now nothing different between Bitcoin and Euros as far as taxes go, which is as it should be.

> what's different about taxes in regards to bitcoin vs. government currency

The difference is that Bitcoin is now recognized as a currency, and as such is not subject to VAT when one wishes to, for example, exchange Euros for Bitcoin. Previously, EU residents would pay VAT on such an exchange because Bitcoin were more or less recognized as a good or service, and thus subject to VAT.

You don't "have to pay sales tax on it" when you buy BTC like you pay sales tax when you buy a banana. But you still have to pay sales tax when you purchase a banana with BTC.

Except Bananas are zero VAT rated, meaning no VAT is paid on them either. :)

Heh, should have checked before I made the assumption.

Ontario still charges HST on Bitcoin exchanges

http://www.correntmacri.com/harmonized-sales-tax-due-sale-bi...

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