Bitcoin and other digital currency will not be taxable when exchanged in Europe.
Thanks to a dispute in Sweden, the EU Court of Justice in Luxembourg has ruled digital currency on a level with traditional cash whereas the exchange of it for another payment instrument is not subject to value added tax (VAT).
This basically puts Bitcoin in the realm of being a currency itself. Last month the United States solidified that Bitcoin was a commodity, much like oil. In this case Bitcoin trades will be treated as exchanging cash for a payment instrument.
Spain did something similar earlier this year.
The ruling is to eliminate the complications of determining the value of the transaction, which in the United States remains complex. The IRS considers the capital gain on any transaction taxable when that gain is realized.
This European tax ruling is a good things both for traders and as one further step in the legitimacy of digital currency.
Story by dinbits
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