The Court of Justice of the European Union has ruled that Bitcoin is a currency and that trading in it is exempt of VAT.
Dutch Bitcoin exchange Litebit.eu had to pay 21% VAT over their margins, but can now ask for a tax refund, according to CEO Rogier Fischer in Business Insider UK.
The ruling (PDF to press release) follows a year in which banks worldwide have been contemplating the use of blockchain, the electronic public ledger used for all Bitcoin transactions.
In 2013 Dutch Finance Minister Jeroen Dijsselbloem ruled that Bitcoin was not electronic money. Arnoud Engelfriet wrote last week that the European ruling brings Bitcoin “a step closer to being money”.
Dutch people still need to pay capital tax over the Bitcoin they own, because capital tax is calculated over the value of all possessions, not just over that of money.
(Photo by BTC Keychain, some rights reserved)
Tags: Bitcoin, currency, money, taxes, VAT
Are the Dutch goody two-shoes or do they merely possess a strong sense of civic duty? I’ll leave that for our readers to decide.
According to Z24 last Thursday the Dutch and the Fins are the best at paying their value added tax (VAT).
The European Commission compared the expected VAT with the VAT that was actually collected in 26 Member States in 2012. Finland and the Netherlands had a VAT gap of 5%, closely followed by Luxembourg at 6%. Romania had the largest gap at 44%. The average VAT gap for the European Union was 16% which translates to an estimated 177 billion euro in lost tax revenue. This lost revenue is borne by the governments and by the entrepreneurs who actually do pay VAT.
The way VAT works is that it is collected for the government by the businesses at the point of sale. It is a consumer tax, so businesses get to deduct the VAT they themselves paid from the money they send to the government.
Tags: btw, consumers, European Union, Finland, fraud, taxes, VAT
Next year, the sales tax on cleaning will be lowered, Treasury Minister Kees de Jager announced to parliament yesterday, according to Z24 (Dutch).
Nearly all services have a 19% VAT (Value Added Tax), but cleaning personnel will now join the ranks of hairdressers, painters and bicycle repair people at 6%. The measure is taken in the hope that more people will hire legal cleaning personnel (i.e. cleaning personnel that pay taxes over their income). In 2004, the government started a program that heavily subsidized legal cleaning personnel, so that their services came within the reach of ordinary households. The program (Dutch) was cancelled last year, because it did not have much of an effect.
(Photo of Banksy’s Cleaner by Dan Brady, some rights reserved)
Tags: Banksy, cleaning, jobs, taxes, VAT