The European Court of Justice has ruled that the exchange of all digital currencies, such as the bitcoin, should be treated like traditional money, i.e. bitcoin and all other cryptocurrencies are now exempt from VAT throughout Europe.
According to the Europe’s highest court, virtual currency transactions like buying and selling bitcoin are similar to transactions of other “currency, bank notes and coins used as legal tender.”
This Thursday ruling was, in fact, a response to Swedish tax authorities that argued bitcoin transaction shouldn’t be tax free in a dispute with David Hedqvist. Hedqvist wanted to offer bitcoin exchange on his Swedish website, but he couldn’t come to an agreement with the Swedish government whether such service should be exempted from VAT or not.
After finding out the court’s decision, Hedqvist gave a statement describing it as “sensible” and highlighted the importance of having a clear guidance regarding VAT.
This win for all digital currencies has already made a positive impact on the bitcoin price, which noted a jump over the weekend. Recently, the bitcoin noted a similar win in the United States when the U.S. Commodity Future Trading Commission defined is as a commodity like corn and oil.