ollowing a June disagreement between Sweden’s tax authority and Daniel Hedqvist, operator of a Swedish Bitcoin forum and exchange, Sweden wanted to charge VAT and Hedqvist argued it wasn’t allowable under European Union rules.
Of note that while the United Kingdom had exempted Bitcoin transactions from VAT, other countries including Germany wanted to charge the tax.
The ruling from the court found that when Bitcoin exchanges transfer fiat currencies into Bitcoin for a fee they are exempt from EU rules barring such taxes on transfers of “currency, bank notes and coins used as legal tender.”
The ruling delivers certainty for Bitcoin across the 28 nation European Union by removing any future threat of taxes any one of the member states may have decided to implement, usually for revenue raising purposes in the future.
“It’s very good news. If you were taxed on the exchange it would make it an inferior currency to other currencies, so the implications of it being treated as a currency are that it can free flow,” Bnktothefuture.com Chief Executive Officer Simon Dixon said.