bitcoin and taxes dr aleksandra bal international bureau for fiscal documentation (ibfd) amsterdam...
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Bitcoin and taxes
Dr Aleksandra BalInternational Bureau for Fiscal Documentation (IBFD) Amsterdam
Bitcoinference 201522 February 2015
Agenda
Bitcoin status Bitcoin and income
taxes Bitcoin and VAT
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Bitcoin status Money in economic sense
Medium of exchange Unit of account Store of value
Money in legal sense Central management Legal tender status Physical carrier
Electronic money Link to traditional monetary
system Identifiable issuer
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Bitcoin status
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Tax authorities’ views on Bitcoin status
United States
property
Australia neither money nor a foreign currency but an asset
Netherlands not: legal tender, financial product, electronic money
Denmark not currency
Norway asset not currency
Finland not: currency, security or financial product
Finland currency
Bitcoin and income taxes Income tax rules vary from country to country.
Some countries tax everything (e.g., the United States), whereas others only selected types of income (e.g., Netherlands).
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Types of transactions relevant for income tax purposes
Exchanges of bitcoins for legal currency
Exchanges of bitcoins for other goods and services (barter)
Bitcoin mining
Distinction: business activity versus transactions performed in private capacityLong- vs. short-term capital gain
Types of transactions relevant for VAT purposes
Exchanges of bitcoins for legal currency
Exchanges of bitcoins for other goods and services
Bitcoin mining
Bitcoin and VAT
VAT is harmonized in the European Union. The Court of Justice of the European Union is the supreme court in VAT matters.
VAT is levied on supplies of goods and services for consideration
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Bitcoin and VAT
VAT exemption for bitcoin transactions?
Article 135 of the VAT Directive: Member States must exempt:(d) transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments;(e) transactions, including negotiation, concerning currency,bank notes and coins used as legal tender, with theexception of collectors' items…
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Bitcoin and VATTax authorities’ views on VAT exemption
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Exemption No exemption
Belgium Norway
Finland Estonia
United Kingdom (exceptions)
Australia
Singapore
Referral to the Court of Justice of the European Union:Case C-264/14, Skatteverket v. David Hedqvist
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Bitcoin and taxes
Dr Aleksandra BalE-mail: [email protected] thesis “Taxation of virtual currency”: http://hdl.handle.net/1887/29963Summary of research on virtual currency: https://www.youtube.com/watch?v=3PDi-ZTMCHY