Flickr / Steven Depolo
Europe’s highest court is due to rule on the value-added tax (VAT) status of bitcoin exchanges in Europe on Thursday — a legal decision that could have far-reaching consequences for the digital currency in Europe.
The European Court of Justice could say that purchases at exchanges are VAT-exempt, as bitcoin enthusiasts are hoping. This would mean Europeans can continue to buy bitcoin with fiat currency without paying tax. Alternately, it could rule that the tax should apply, arguably damaging the competitiveness of European bitcoin businesses. Or it could decide that bitcoin itself should be subject to tax — a significant setback for the digital currency.
We spoke to Roger van de Berg a tax lawyer at law firm Baker McKenzie in the Netherlands about the potential consequences. Here’s what you need to know.
The forthcoming ruling stems from a Swedish court case.
“It [concerns] David Hedqvist, who planned operating the Swedish bitcoin exchange service on his website. Through his website it would be possible to exchange bitcoin into Swedish Krona and vice versa. The website operates a bid price