[2018-02-28] Germany Won't Tax You for Buying a Cup of Coffee With Bitcoin

[WatchMaker]

Germany won't tax bitcoin users for using the cryptocurrency as a means of payment, the Ministry of Finance has said.

The guidance, published Tuesday, sets Germany apart from the U.S., where the Internal Revenue Service treats bitcoin as property for tax purposes - which means that if an American buys a cup of coffee with bitcoin, it's technically considered a sale of property and potentially subject to capital gains tax.

Instead, Germany will regard bitcoin as the equivalent to legal tender for tax purposes when used as a means of payment, according to a new document.

More: https://www.coindesk.com/germany-considers-crypto-legal-equivalent-to-fiat-for-tax-purposes/

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[figmentofmyass]

this seems good, but i'm confused about how to interpret this:

For tax purposes, this means that converting bitcoin into a fiat currency or vice versa is "a taxable miscellaneous benefit." When a buyer of goods pays with bitcoin, an article of the EU's VAT Directive will be applied to the price of bitcoin at the time of the transaction, as documented by the seller, according to the document.

However, as per the EU ruling, the actual act of converting a cryptocurrency to fiat or vice versa is classified as a "supply of services," and therefore a party acting as an intermediary for the exchange will not be taxed.

the party acting as an intermediary for the exchange will not be taxed---but what about the party buying the good? hopefully the headline is correct, because the body of the article doesn't explain why equivalence to legal tender for tax purposes = no taxes on your gains.

[zoran.drobnjak]

Hopefully someone should additionally clarify and confirm validity of the above information.

Confirmation of same would have huge implications for all EU citizens as such legislative is likely to be mirrored by other member states as well.

[Samarkand]

...

Confirmation of same would have huge implications for all EU citizens as such legislative is likely to be mirrored by other member states as well.

The new German guidance is based on a decision by the European
Court of Justice from 2015. It is to be expected that other member states will
have no choice, but to implement it in a similar way.

The headline is misleading as usual for a Coindesk article. No German legislator ever
seriously considered the possibility of taxing the price movements of Bitcoin
when buying a cup of coffee with it. The taxation of Bitcoin has been pretty clear
for years (no taxes if a holding period of 1 year is passed) and is
working pretty well for all parties involved.

Compared to the tax situation regarding Bitcoin in other countries Germany´s approach
has been one of the best for years.

[Lampaster]

...

Confirmation of same would have huge implications for all EU citizens as such legislative is likely to be mirrored by other member states as well.

The new German guidance is based on a decision by the European
Court of Justice from 2015. It is to be expected that other member states will
have no choice, but to implement it in a similar way.

The headline is misleading as usual for a Coindesk article. No German legislator ever
seriously considered the possibility of taxing the price movements of Bitcoin
when buying a cup of coffee with it. The taxation of Bitcoin has been pretty clear
for years (no taxes if a holding period of 1 year is passed) and is
working pretty well for all parties involved.

Compared to the tax situation regarding Bitcoin in other countries Germany´s approach
has been one of the best for years.

Such a rule of law will stimulate investments in Germany, but I do not understand how this will happen in the case of bitcoin. If you have exchanged bitcoin for euros and keep your money in a Bank account during the year the Bank uses this money and credits the economy. The state gets income from the profits of enterprises. Everyone's happy. But with cryptocurrency accounts, this is impossible. Maybe I don't understand something?

[Zicadis]

...

Confirmation of same would have huge implications for all EU citizens as such legislative is likely to be mirrored by other member states as well.

The new German guidance is based on a decision by the European
Court of Justice from 2015. It is to be expected that other member states will
have no choice, but to implement it in a similar way.

The headline is misleading as usual for a Coindesk article. No German legislator ever
seriously considered the possibility of taxing the price movements of Bitcoin
when buying a cup of coffee with it. The taxation of Bitcoin has been pretty clear
for years (no taxes if a holding period of 1 year is passed) and is
working pretty well for all parties involved.

Compared to the tax situation regarding Bitcoin in other countries Germany´s approach
has been one of the best for years.

Agree with you, headline is misleading as the cup of coffee is related to someone who is not a citizen of the country which makes some sense they are not taxed and am not sure what the EU thinks about this as this 2015 guidance is some how obsolete in relation to crytpocurrencies.

[d5000]

This is the original document (PDF)

The Coindesk article is totally misleading, as Samarkand already wrote. It only covers the application of VAT ("Umsatzsteuer", in German), with the following points:
- Users must not pay VAT when they buy Bitcoin or trade them for goods and services (it is treated like fiat/legal tender, in this case) - this does also apply for big traders
- Exchanges and wallets must pay VAT for the fees they charge
- Miners must not pay VAT neither on the transaction fees they receive (because these are paid in a "voluntary" manner) nor on the rewards (because there is no identifiable "client" in this case who would pay the VAT)

So in no moment they write about capital gains tax, it's only about VAT.

[richardsNY]

So in no moment they write about capital gains tax, it's only about VAT.

Coindesk and CCN are amongst the worst when it comes to publishing articles with twisted content and flashy titles. It has been somewhat of a trend amongst other crypto news mediums as well, but in no shape or form do they even come close to the two aforementioned sites. Overall, I don't see anything new enough that's even worth reporting about, so shame on Coindesk and all other copycats blatantly mirroring this article on their sites. It just shows how desperate crypto media land is when it comes to rehashing old information to reach their monthly revenue targets. It has always been quantity over quality, but the last 12 months are absolutely the worst. It's a straight dive towards the South....

[darkangel11]

Great news. I've been actually  using German exchanges and their bank services as I've never had any problems there, everything is handled fast and easy. There was one case of some girl being raided by the police in Germany for selling BTC, but I suspect she was a drug dealer as her story didn't make much sense.
As for taxes, I'm fine with paying a fair share, but when they are starting to get ridiculous, exceeding 20% of income, like in Japan, France and some other countries, I'm not going to stand and watch smiling. None of you should.