Does this mean that Bitcoin has a different tax status in the EU vs the US? If so, does this suggest future bitcoin growth will be favored in one or the other?
No, this ruling is in line with how the US does it. Before, it was unclear whether the EU would charge sales tax (VAT) when you buy bitcoins on an exchange. Now it's clear that they won't. The US has never charged sales tax on bitcoin exchanges.
Tax-free is an exaggeration, as bitcoin is still subject to capital gains tax, and of course you'll have to pay sales tax/VAT if you use bitcoin to buy things, just as if you bought the same things with euros or dollars.
Buying it, because now it's treated as an exchange of currency. There is now nothing different between Bitcoin and Euros as far as taxes go, which is as it should be.
> what's different about taxes in regards to bitcoin vs. government currency
The difference is that Bitcoin is now recognized as a currency, and as such is not subject to VAT when one wishes to, for example, exchange Euros for Bitcoin. Previously, EU residents would pay VAT on such an exchange because Bitcoin were more or less recognized as a good or service, and thus subject to VAT.
You don't "have to pay sales tax on it" when you buy BTC like you pay sales tax when you buy a banana. But you still have to pay sales tax when you purchase a banana with BTC.
This is a horrible headline and directly promotes misunderstanding. One might even call it clickbait.
In reality, virtual currencies can now be exchanged tax-free, effectively putting them in-line with other currencies—no special status has been afforded specifically to Bitcoin that makes it some kind of tax shelter or similar. Capital gains and taxes while spending Bitcoins or real goods and services still apply as with any currency.
Agreed on the headline, but more to the point is that now the EU does not draw a distinction between virtual and traditional currencies. Or this is at least a step in that direction.
Headline is indeed horrible, but there's some merit to the news. There could've been many other tax implications with Bitcoin and the article exposes that's not the case.
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[ 4.0 ms ] story [ 48.8 ms ] threadTax-free is an exaggeration, as bitcoin is still subject to capital gains tax, and of course you'll have to pay sales tax/VAT if you use bitcoin to buy things, just as if you bought the same things with euros or dollars.
If I still have to pay capital gains tax and sales tax on it, then what's different about taxes in regards to bitcoin vs. government currency?
The difference is that Bitcoin is now recognized as a currency, and as such is not subject to VAT when one wishes to, for example, exchange Euros for Bitcoin. Previously, EU residents would pay VAT on such an exchange because Bitcoin were more or less recognized as a good or service, and thus subject to VAT.
http://www.correntmacri.com/harmonized-sales-tax-due-sale-bi...
In reality, virtual currencies can now be exchanged tax-free, effectively putting them in-line with other currencies—no special status has been afforded specifically to Bitcoin that makes it some kind of tax shelter or similar. Capital gains and taxes while spending Bitcoins or real goods and services still apply as with any currency.
This should be the headline...
https://en.wikipedia.org/wiki/Sales_tax