Spain Exempts Bitcoin Purchases from VAT
- Spain has joined what may be a growing list of Eurozone countries exempting purchase of bitcoin from Value Added Tax (VAT).
Spain has joined what may be a growing list of Eurozone countries exempting purchase of Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that from Value Added Tax (VAT).
The common rationale for the exemption is that consumers are buying payment or financial instruments. Spain’s General Directorate of Taxes classified virtual currencies as “other negotiable instruments”. A 2006 Directive states that member countries shall exempt the following transactions for VAT:
“transactions, including negotiation, concerning deposit and current accounts, Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl , transfers, debts, checks and other negotiable instruments, but excluding debt collection”
The ruling explained that virtual currencies work as a means of payment and for tax purposes, functioning similar to money.
Although the Directive originates at the European Union (EU) level, member countries have room to interpret and implement such directives as they see fit. Therefore, not every EU nation has taken the same route. Spain joins Germany, Finland, Belgium, UK, and possibly France with its exemption, but Estonia and Poland have ruled that virtual currency sales are not exempt. Most other Eurozone members remain undecided.
Spain’s decision was helped by the precedent set in a case in the Netherlands. A company, Granton Advertising, engaged in the sale of gift cards that granted discounts to their users. In essence, it can be viewed that they were selling ‘monetary value’. It was ruled that the company was obligated to submit VAT payment, as the cards did not fall under the aforementioned exemption of “other negotiable instruments”. Appeals by the company were unsuccessful.
Spain’s tax authority observed that in Granton’s case, the exemption of “other negotiable instruments” was closely linked with “payment instruments”, thereby indicating bitcoin as eligible.
Spain has joined what may be a growing list of Eurozone countries exempting purchase of Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that from Value Added Tax (VAT).
The common rationale for the exemption is that consumers are buying payment or financial instruments. Spain’s General Directorate of Taxes classified virtual currencies as “other negotiable instruments”. A 2006 Directive states that member countries shall exempt the following transactions for VAT:
“transactions, including negotiation, concerning deposit and current accounts, Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl , transfers, debts, checks and other negotiable instruments, but excluding debt collection”
The ruling explained that virtual currencies work as a means of payment and for tax purposes, functioning similar to money.
Although the Directive originates at the European Union (EU) level, member countries have room to interpret and implement such directives as they see fit. Therefore, not every EU nation has taken the same route. Spain joins Germany, Finland, Belgium, UK, and possibly France with its exemption, but Estonia and Poland have ruled that virtual currency sales are not exempt. Most other Eurozone members remain undecided.
Spain’s decision was helped by the precedent set in a case in the Netherlands. A company, Granton Advertising, engaged in the sale of gift cards that granted discounts to their users. In essence, it can be viewed that they were selling ‘monetary value’. It was ruled that the company was obligated to submit VAT payment, as the cards did not fall under the aforementioned exemption of “other negotiable instruments”. Appeals by the company were unsuccessful.
Spain’s tax authority observed that in Granton’s case, the exemption of “other negotiable instruments” was closely linked with “payment instruments”, thereby indicating bitcoin as eligible.