European exchanges react to Bitcoin VAT exemption

Earlier this week, the European Court of Justice decided to remove Value Added Tax ( VAT ) from Bitcoin transactions.

In doing so the court effectively recognised that Bitcoin is a legal means of payment in Europe and put it on an equal footing with other currencies for tax purposes.

In July, the court’s general counsel Juliane Kokott proposed that the court should exempt bitcoin from tax on transactions and purchases. A few months later, the court also announced the exemption of bitcoin from VAT.

Europe’s top court first started taking bitcoin taxation seriously in June last year, when the Swedish Tax Agency raised questions after the court decided that digital currency transactions should be exempt from VAT. Forum operator Daniel Hedqvist also had a lot of opinions on the matter. He wanted to set up a bitcoin brokerage business at the time.

Unsurprisingly, the court’s new ruling was welcomed by European exchange operators, several of whom told CoinDesk that it was a positive step for businesses buying and selling digital currency technology.

' Major milestone '

Some operators see the move as a watershed moment for Bitcoin in Europe. Filip Godecki, COO of Poland-based Bitcurex , predicts the regulation will help make digital currencies more acceptable.

" This court ruling is a recognition of the payment function of virtual currencies, " he said. " This ruling may promote the development of encrypted payment methods in the EU and the popularity of Bitcoin. "

Nejc Kodric, CEO of Bitstamp , said the regulation “ will bring additional legal certainty to the economy . ”

“ Thanks to Mr Hedqvist , all Bitcoin businesses serving EU customers can now breathe a sigh of relief knowing that they are safe with the surprise news of VAT exemption for Bitcoin, ” he said.

According to LocalBitcoins founder Nikolaus Kangas , the regulation is a “ major milestone for Bitcoin . ”

“ This regulation will clearly help further legitimize Bitcoin as a real currency, ” he said in an email.

Paymium co-founder Pierre Noizat told CoinDesk that while his company is still affected by the court ruling, the ruling is a positive for the exchange.

" First of all, I would say that for our company as a bitcoin exchange and payment solution provider, this new regulation is a key step forward, " he said. " Such a regulation that is acceptable to businesses and the general public will also help reduce the risks and uncertainties that may come with adopting innovative technologies. "

Good news for European startups

Alberto Gomez Toribio, CEO of Coinffeine , is one of a group of exchange operators who believe the decision will help make Europe a more business-friendly environment for companies building products and services around bitcoin.

" I am pleased that regulations have proven to be more effective than technology in organizing rights and markets to function properly, " he said in an email.

Helga Danova of CEX.io called the regulation “ entirely reasonable and in line with expectations . ”

“ The court’s official position makes the EU a more Bitcoin-friendly environment than before, unlike some Eastern European and Central Asian countries, ” she said.

Erik Voorhees, CEO of ShapeShift , also believes that the regulation will allow Europe to take full advantage of emerging technologies and businesses related to Bitcoin.

He told CoinDesk :

“ It’s a relief for politicians to stop regulating and taxing everything. This regulation will further help Europe surpass the United States as the center of digital currency innovation. ”