Bitcoin now 'unit of account' in Germany(theguardian.com) |
Bitcoin now 'unit of account' in Germany(theguardian.com) |
This bodes well for Bitcoin, because other countries are likely to follow Germany's example.
That's not a good thing for bitcoin, though, or for the free market in general. One of the main ideas behind bitcoin is its ease of use compared to exisiting methods. The more regulations and limitations imposed on it, the more it becomes like everything else, in terms of ease of use.
> 2. "electronic money" means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in point 5 of Article 4 of Directive 2007/64/EC, and which is accepted by a natural or legal person other than the electronic money issuer;
Germany is doing nothing strange, all the EU state will have to do similar things in the future. Bitcoin may be a distributed currency without a politically backed central bank, but it is still a currency, so it is treated as such by any competent tax office.
You bitcoins are accepted because they are recognized by others to be part of a block originally mined by someone.
Really not that different from how money is "printed" by central banks these days (somebody presses the "generate €1.000.000" key and that updates a value in a DB).
But I am neither an accountant, nor a lawyer, nor an economist, so the likelihood of my guess being correct is rather slim.
If you manage to hide that income for some time but it comes to light a few years later - BAM, you owe the back taxes in triple+interest.
Taxing that works - if the volume is sufficient to arise suspicion, then seize the relevant documents and computers, find evidence and charge you for tax fraud.
This is good for the moment, but also begs a question: when the real regulation comes into play how it will be played? But for now - relax and enjoy!
Bitcoin is great when:
1. You want to accept or make payments from a country where CC fraud is high or banking is rare/expensive.
2. You worry about high inflation rates in your home currency, and your government creates a lot of obstacles to move your money to other currencies (like today in Argentina).
3. Or you want transact in a grey market tax-free. E.g. a guy selling his IT consulting services.
And then, if they don't like your choice rate, then they pick a rate themselves, tax you on that, and fine you for misrepresenting your income.
Afterwards you (and everyone else) begs them to publish some guidelines on what rate should be used, they do so, and everyone is [mostly] happy.
No matter if your income is in Euro, Yen, gold, goats, casino chips, redeemable in-game credits, gems, Bitcoin or anything that may ever be invented - that income is taxable.
If you are offering to hold deposits of value for public, or value transfers to third parties - no matter if that is in Euro, Yen, gold, goats, casino chips, redeemable in-game credits, gems, Bitcoin - you need to follow the financial service regulations.
The only way to avoid that is if (while) your "new money" is useless as money, i.e., you can't buy stuff with it.
For example, the Bank of Japan could lower the value of the yen against the bitcoin by purchasing large amounts of bitcoin using yen on the open market.
- Anyone in the UK
- Individuals in the EU
And:
- Reverse charge VAT to business in the EU
Having to charge VAT on Bitcoins is a show stopper if you're intending to sell them unless you close your doors to EU customers.
Bitcoins need to be classed as VAT exempt, or small business in the UK trying to get into Bitcoin will always struggle to grow.
There is no official stance on bitcoin by the UK government, or tax authorities. VAT is not chargeable on bitcoin transactions. There was one gy who was advised by his accontants that he should be charging VAT but that was not a legal requirement, more his accoutnants taking a very risk averse position, that way if VAT was ever brought in on bitcoin he would not get an unexpected VAT bill.
There are There are also some goods and services that are 2 types of 'exemption' to VAT:
* exempt - so no VAT is charged on them
* outside the scope of the UK VAT system altogether
Bitcoin is outside the scope of VAT entirely and it would require the tax man/govt making a declaration on bitcoin as to how it is treated under VAT rules. This has not happened, therefore VAT is not applicable to bitcoin.