Bitcoin legally exempt from VAT, rules EU Court of Justice
Decision means EU will treat digital currency the same as traditional cash
22/10/2015: Bitcoin is officially exempt from VAT, the European Court of Justice ruled today, meaning that Bitcoin will be treated the same as traditional money across all 28 EU member states.
The court was reviewing whether VAT should be charged on exchanges like the failed Mt. Gox, which convert the digital currency into fiat currency while taking a transfer fee.
The review began following disputes between Swedish exchange operators and the country's tax office in June 2014, after Britain had already scrapped VAT on the digital currency in March 2014.
This decision brings Bitcoin and other digital currencies closer to mainstream acceptance, and may lead to greater adoption in the wider financial and economic space, said lawyer Jonathan Rogers.
"From a strategic perspective, this decision, which appears to ensure virtual currencies will be seen as cash, should be an opportunity for emerging forms of financial services & FinTech to get a shot in the arm bringing growth and consolidation," said Rogers, a financial services regulatory group partner for Taylor Wessing.
"Greater clarity can now emerge in the debate about how to regulate virtual currencies, leading to increased credibility and consumer confidence; in turn, virtual currencies will have a much greater critical mass in the financial services system."
The news comes after the UK government decided to regulate Bitcoin with the same anti-money laundering rules it uses on fiat currencies, widely seen as a positive sign of digital currency's progress towards mainstream acceptance.
19/03/2015: The UK government has announced it will regulate digital currencies with standard anti-money laundering rules, a step towards the country embracing Bitcoin.
A report on the new regulation was released alongside the 2015 budget announcement from George Osborne, with increased support for innovation and the fight against criminal use of digital currencies such as Bitcoin also outlined by Britain's Treasury.
"Today's announcement is significant in that it brings Bitcoin and other block chain technologies closer to mainstream adoption," said Paul Gordon, UKDCA board member. "The UKDCA is pleased that its recommendations have been adopted and will be leading the process with the BSI to develop industry standards."
Many have been deterred from using digital currencies because of the prevalence of illegal transactions they have been used for, as well as the tendency for hackers to target them. With government regulation, however, "cryptocurrencies" could quickly rise in popularity.
Many have already shown support for Bitcoin, including IBM and the Bank of England, according to Reuters. This is despite the latter's assertion that digital currencies could lead to more cases of fraud and damage to the economy if used widely.
The government released a report on the future of FinTech European financial technology saying: "Digital currencies such as Bitcoin have the potential to replace traditional currency and, by extension, the need for central banking and regulatory systems."
In addition to this announcement, Wednesday also saw UK Chancellor George Osborne reveal a 40 million investment in smart city technology, commitment to bringing ultrafast broadband to homes across the UK, introduction of the Google tax', 100m for driverless cars push and plans to nurture tech clusters in locations such as Manchester, Leeds and Sheffield.
Top 5 challenges of migrating applications to the cloud
Explore how VMware Cloud on AWS helps to address common cloud migration challengesDownload now
3 reasons why now is the time to rethink your network
Changing requirements call for new solutionsDownload now
All-flash buyer’s guide
Tips for evaluating Solid-State ArraysDownload now
Enabling enterprise machine and deep learning with intelligent storage
The power of AI can only be realised through efficient and performant delivery of dataDownload now