Bitcoin and its digital peers can now be treated in the same way as traditional money, according to the European Court of Justice.
In a statement Thursday morning it said that bitcoin transactions "are exempt from VAT (value-added tax) under the provision concerning transactions relating to currency, bank notes and coins used as legal tender."
The ruling comes after a dispute in a Swedish court when Swedish citizen
David Hedqvist applied for permission to run
his online bitcoin exchange. At the beginning, the Swedish Revenue Law Commission told Hedqvist that bitcoin was exempt from VAT, however, the Swedish
Tax Authority appealed against that.
In September, the U.S. Commodity Futures Trading
Commission (CFTC) said that bitcoin would be classed as a commodity in
the country.
The announcement came as the regulator
ordered bitcoin options trading platform Coinflip, and its CEO Francisco
Riordan, to stop trading as it had not registered and complied with
its regulations. It added that it had also filed, and simultaneously
settled, charges against the San Francisco-based company.
Bitcoin is a digital or cryptocurrency that allows
users to exchange online credits for goods and services. Bitcoins can be created online by
using a computer to complete difficult tasks, a process known as mining, and the currency is not controlled by central banks.
