[2015-10-24] Quartz: Bitcoin is a currency, the EU admits

[pawel7777]

Bitcoin is a currency, the EU admits

http://qz.com/532103/bitcoin-is-a-currency-the-eu-admits/

When it comes to bitcoin, Europe’s highest court and the US’s major tax agency don’t agree on exactly what it is.

In a decision last week, Europe’s Court of Justice effectively decided that bitcoin is a currency, and therefore transactions in which bitcoins are exchanged for other currencies are exempt from value-added taxes. All exchanges relating to bank notes, coins and currencies are exempt from value-added taxes under European law. (Full judgement is available here.)

In laymans terms, the EU’s highest court thinks that virtual currencies like bitcoin are essentially the same as other currencies.

There’s a different view across the pond. Last year, the IRS decided that bitcoin is essentially is property for tax purposes. Separately, the US Commodity Futures Trade Commission last month argued that bitcoin is a commodity like gold or silver, and as such fell under its own regulatory purview.
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[Slark]

I am surprised that lawgivers around the world can't find one consensus regarding bitcoin. In Eu is apparently a currency, in Japan bitcoin is considered above all laws and in Canada it is commodity.
Make up your mind already!

[RustyNomad]

I am surprised that lawgivers around the world can't find one consensus regarding bitcoin. In Eu is apparently a currency, in Japan bitcoin is considered above all laws and in Canada it is commodity.
Make up your mind already!

I think the problem is that it's actually both. It can be used as a currency to pay for items and or to send to others just as you would with fiat. Its however also a commodity like gold as many acquire it with the intent of holding onto it waiting for it to appreciate in value leading to an actual capital gain being made and thus the reason for wanting to tax it for capital gains tax.

I'm don't think all countries will ever reach consensus on how to handle bitcoin. Best solution I can think of is that its treated in accordance with how it was used but this is another can of worms.