Good News from Her Majesty: No Tax on Bitcoin

Those looking for some good news amid the upheaval in the crypto-world will be delighted to know that if they're in the U.K., they won't need to worry about paying taxes on 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 Read this Term.

Her Majesty's Revenue and Customs (HMRC), the tax authority in the U.K., has announced that both the 20% value added tax (VAT) on trades as well as tax on gains will be scrapped, as reported by the Financial Times. Quite understandably, entrepreneurs in bitcoin businesses had long complained that the VAT made it virtually impossible for them to compete globally.

As governments around the world have refused to consider Bitcoin a currency, the ruling, at least for tax purposes, is doing just that: it is based on the EU law exempting 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 Read this Term and transfers of "negotiable instruments" from sales tax.

The concrete stance differs markedly from that of the US, which still has yet to offer taxpayers guidance on how virtual currencies shall be treated. The uncertainty leaves in doubt how capital gains, losses (perhaps even those from MtGox) and mining profit should be treated.

The U.K.'s favorable stance toward cryptocurrency seems to be attracting more business activity. Bitcoin Foundation reportedly informed the Financial Times that it plans on moving its head offices from the U.S. to the U.K. this spring.

The tax authority has stated:

“HMRC has been working closely with the Bitcoin industry on the tax treatment of trading in Bitcoins and commission. We will be issuing guidance shortly.”