The answer is 2 posts up.

I think the writer is forum user matonis.

My interpretation is that the service is closing down when most funds have been withdrawn. I would certainly expect a static page with contact information to be there for at least 3 months. I do not think that people deserve to lose their money for not visiting the site for 3 months.


If the site has a lot of users I'm sure there are ways to generate revenue.

I seriously don't see the point of this post. Do you believe that that's why he is shutting down? If he feels that he doesn't have time to run it there is really nothing else to do than what he did. Everyone can get their funds back, he will handle requests manually after the site has been shut down. He also told people to get in touch if they wanted to acquire it.

@libcoin: I have to do some more reading on gift cards but I did find a similar explanation on a Swedish site. I find it really promising that they do have special rules for gift cards and it seems to be simply because a gift card is more similar to a currency than a good. For example, I found the following on a Swedish site (roughly translated):


It is easy to argue that bitcoins are used as a means of payment rather than a good so by that logic the authorities should be able to help us. I will send another mail to the Swedish tax authorities mentioning the comparison to gift cards.

libcoin, do you know that that's how they handle VAT when accepting gift cards or are you just speculating? Seems to be that when the gift card is exchanged for dinner that would be considered barter.

I have a really hard time seeing that the authorities would accept the reasoning that the bitcoins didn't pay the dinner, that it was actually the exchange where I bought my bitcoins that is paying for dinner. Also, I still don't see in step 1 why any individual would pay 25% extra for bitcoins when they instead can buy it from another individual.

Maybe I'm missing something, I skimmed through your post rather quickly.

Cool. So it is the University of Rostock that is the exhibitor?

Sounds great! If they disagree with something that we have concluded in this thread, please make sure that they explain exactly what they think that we misunderstood and point us to some sources.

Yeah, this sucks. But to the buyer there would be no difference between buying through Technomage and buying directly from Mt.Gox,, right? They might need to pay VAT either way.

Sounds like a plan. I have considered doing something similar but it seems that in Sweden you might need a permit from the Financial Services Authority to run even such a service (i.e. acting as a intermediary, forwarding someones payments etc.). You can apply for an exemption but even that costs some money and the market is very small in Sweden right now so I don't see that it's worth it.

But that's a bit off-topic, my main reason for wanting to get the VAT thing cleared up is to be able to tell Swedish merchants how to work with Bitcoin. I think that's absolutely necessary for Bitcoin to take off.

Thanks Jan for creating Instawallet! It's a great concept and a great way to quickly introduce people to Bitcoin. Hope that it will live on in some form.

If we would actually bring the miner into all of this, wouldn't that simply be considered an intermediary? From my link: "B2C services provided by an intermediary are taxed at the location where the main transaction, in which the intermediary intervenes, is taxable".

But the other part of my quote that I think deserves some more discussion is: "The supply of services between businesses (B2B services) is in principle taxed at the customer's place of establishment, while services supplied to private individuals (B2C services) are taxed at the supplier's place of establishment.". To me that means that if I sell to an individual I still have to add VAT. So I wouldn't be completely comfortable unless it is actually a foreign company that buys from me (one which doesn't directly connect me with a buyer).

Barter was exactly what I wrote about in the original post. Since BTC is considered a good (or actually an electronic service) a transaction where someone pays for something with bitcoins will be considered barter. But, at least in Sweden, you still have to consider VAT when you do barter, you simply treat it as two transactions. Are you really sure that that is different in Italy?

I'm not sure I understood your last sentence completely but the problem arises when a company wants to get rid of the bitcoins. The bitcoins are sold (either as barter or as exchanged for fiat currency) and then VAT must be added to the sale.

Done!

Download bitaddress.org or a similar tool that will create a private key by doing a SHA256 hash of a passphrase. Use it offline to be sure that noone ever sees the private key.

Create a long passphrase and repeat it to yourself 10 times every night when you go to bed. It's not hard to remember a long passphrase as long as it makes any sort of sense and by repeating it every night it will be virtually impossible to forget it. Write a little poem or something.

This is a passphrase
and it might be lame
but it is the key
to my fortune and fame

You'll feel pretty safe when the phrase you chose is stuck in your head. Also, you don't have to rely on any service to still be there, knowing that it's simply a matter of doing a SHA256 hash.

See this page that your page linked to (section "Supply of services").


Or does that just apply when both countries are within the EU? I'm not sure.

Thanks for your answer! It's at least a good thing that we have reached the same conclusions.


That's interesting, sounds like good workaround. I did some quick reading about it and it seems to be important that the bitcoins are sold to a company abroad, not an individual. I am not exactly sure how things work with exchanges like Mt.Gox, do I sell the bitcoins to Mt.Gox. or to the person who placed the buy order?

Also, out of curiosity, what country are you from?

I have tried to sort out what applies regarding Bitcoin and VAT in Sweden and since some of the rules regarding VAT are harmonized within EU I thought that I'd share this in order to get some feedback from other EU citizens. These are my conclusions (I'm not an expert in this field so feel free to point out any errors or terms that I use incorrectly):

 * Finansinspektionen ("Financial Services Authority"?) in Sweden tell me that they do not consider Bitcoin a currency.
 * The Swedish Tax Agency tell me that I should treat Bitcoin as an "electronic service".

Everything that is delivered electronically is considered a "service" instead of a "commodity", there are a few differences in taxation but I don't think that's what's important here. What's important is that since Bitcoin is not considered a currency a purchase with bitcoins will be considered barter. In barter, one should look each transaction separately so that if e.g. a customer (private individual) buys a table from a company and pays with bitcoins these 2 transactions should be considered:

 1. The customer bought a table from the company
 2. The company bought some bitcoins from the customer

I the first transaction VAT is added by the company and recorded as output VAT. In the second transaction there is no VAT since the purchase is from a private individual. Later when the company wants to get rid of the bitcoins this will be considered a sale of bitcoins (regardless of whether they are exchanged for some currency or if something is bought using them) and then VAT should be added to the sale and recorded as output VAT.

From what I can understand this is a bit problematic. It will be hard for the company to exchange the bitcoins since they must add VAT (in Sweden this is 25%) to the "sale". No private individual will buy at that price since they can buy from eachother with no VAT. Some other company could possibly buy them since they can deduct the VAT but at some point some company will have to return the bitcoins to an individual.

Have other people in the EU reached similar conclusions? If my conclusions are correct it is a pretty big obstacle in getting merchants to start accepting Bitcoin.

For Swedish readers, I have started a similar topic in Swedish at bitcoin.se.

So did anyone read up on what this "faircash" is? Since the guy asking likes P2P payments but think that Bitcoin is nuts it would be interesting to know what his system is about. I found the web site but I haven't had time to read through the technical details yet.

Oops, sorry about that. I read through the first post a bit too quickly.