The German Federal Ministry of Finance considers Bitcoin to be exempt from tax as long as it is used as a means of payment, Cointelegraph Deutsch reported Thursday, March 1

The German Federal Authority issued its decision not to subject purchases with Bitcoin and other cryptocurrencies to taxes on February 27, citing the European Court decision of 2015, which set a precedent for all members of the European Union.

The Court justified its fiscal decision by stating that it regarded cryptocurrency as a legal means of payment:

“Virtual currencies called (cryptocurrencies such as Bitcoin) are considered to be equal to legal means of payment, provided that these virtual currencies have been accepted as alternative and contractual means of payment by the parties to the transaction and have no other purpose than the payment of money. to be used means of payment. “

According to the decision, a conversion from crypto to fiat or vice versa is classified as” other taxable services “. Therefore, a party acting as an intermediary for this exchange will not be taxed. Under this provision, cryptographic traders may also benefit from tax exemptions “they buy and sell Bitcoin as an intermediary on their own behalf.”

The court’s ruling also notes that mining royalties will not be taxed because they are paid on a voluntary basis.

These guidelines distinguish Germany from the United States where the Internal Revenue Service (IRS) treats Bitcoin as the property, which means that every purchase using Bitcoin is technically considered a sale of property and is therefore subject to the capital gains tax.

LEAVE A REPLY