Will Bitcoin Exchanges Pay VAT in Europe? The Answer Will Be Revealed Soon

A ruling on whether bitcoin exchanges in Europe need to pay value-added tax (VAT) on transactions will be formally announced on Thursday.

The decision marks the end of a dispute over whether VAT should be charged on services that buy and sell bitcoin. The inquiry was made by Swedish resident David Hedqvist, who wanted to know if bitcoin should be taxed when he was planning to open a bitcoin brokerage.

A Swedish judge later found that such activity should be exempt from VAT, based on a decision by Swedish tax authority Skatterverket. Ultimately, the European Court was asked to weigh in.

While the court has yet to make a decision, early signs suggest it may uphold the exemption. In July, court advocate Juliane Kokott recommended that bitcoin exchanges be exempt from VAT, a move that was cheered by industry stakeholders and the wider community.

According to some observers, the decision may go beyond the specific issue at hand and could affect European bitcoin users and industry stakeholders.

“In order to answer the exchange services question, the ECJ may first need to assess what the exchange is doing and how the underlying assets are licensed,” Roger van der Berg, a tax attorney at international law firm Baker & McKenzie, recently told Bitcoin Magazine.

“It is therefore possible that the court will also discuss the VAT treatment of virtual currencies and decide whether Bitcoin itself is subject to VAT,” he continued. “If this happens, we will have a clear answer from the European Court of Justice on the position of Bitcoin in the euro area.”

－－－－

Original article: http://www.coindesk.com/european-court-of-justice-set-for-bitcoin-vat-decision/
By Stan Higgins
Compiled by: Satuoxi
Editor: Satuoxi
Source (translation): Babbitt Information