Germany Won’t Tax Cryptocurrencies Used To Make Purchases

[amirshaf]

The German Federal Ministry of Finances considers Bitcoin as tax-exempt so long as it is used as a means of payment, Cointelegraph auf Deutsch reported Thursday, March 1.
The German federal authority published its decision to not subject purchases with Bitcoin and other cryptocurrency to taxes on Feb. 27, citing the European Court’s 2015 decision, which set a precedent for all members of the European Union.
The Court justified its taxing decision by stating that it considers cryptocurrency as a legal means of payment:
So-called virtual currencies (cryptocurrencies such as Bitcoin) are considered equal to the legal means of payment, as long as these so-called virtual currencies have been accepted as alternative and contractual means of payment by the parties involved in the transaction and have no other purpose than being used as a means of payment.”
According to the decision, a conversion from crypto to fiat or vice versa is classified as “other taxable services”. Therefore, a party that is acting as an intermediary for this exchange will not be taxed. Under this provision, operators of crypto exchanges can also get tax exemptions, “if they complete the purchase and sale of Bitcoin as an intermediary on their own behalf.”
The court decision also notes that miner fees will not be taxed, since they are paid on a voluntary basis.
These guidelines distinguish Germany from the US where The Internal Revenue Service (IRS) treats Bitcoin like property, meaning that each purchase using Bitcoin is technically considered to be a sale of property and is, therefore, subject to capital gains tax.

[Proton2233]

That's good news. I think now that similar legislation will be adopted in all EU countries. I do not know how the European cryptocurrency exchanges will work, but I am sure that now we will see an increase in their number. We'll have a choice. I think that the main task of the cryptocurrency is the destruction of the established monopolies. Everyone will benefit from it.

[bocyaj]

It's good news for the investors in the German.They won't invested dollar in the illegal activity.Only draw back is paying tax,we are paying some dollars as a tax in paper money.When the taxation is implement all over the country,bitcoin will become a legal currency all over the world.

[Hydrogen]

Both good and bad here.

The good news is that germany is adopting a somewhat deregulation stance in regard to bitcoin and crypto. This will benefit the crypto industry as taxes which often cripple and strangle businesses are not being implemented.

The bad news could be that recession and global economic slowdown are big enough concerns that germany dares not tamper with the fastest growing sector of finance in the hope that the value being created will help to alleviate any negative economic circumstances which may arise. These fears may already be making their presence known in the form of our recent DOW decline.

[MMM005]

That is a good news for investors and cryptocurrencies users in Germany, And make people depends more on cryptocurrencies, The number of cryptocurrencies exchange will increase of course to make profits!

[btc.xbt.btc]

This is amazing. I think it's because this will help fulfil the empty value that crypto retains with material goods. Very smart.

[Ctn]

Tax exemption declared by the government would be always amazing thing to hear in first place. I mean people can earn as much as they want online and then go on spending them online or offline as the payment made like that way wont be taxed. So things will look like very cheap for them. But this has to be perfect system as people might just buy crypto currencies and then buy big properties thereof. This could be alarming later on as the rule stays that transaction made as crypto currency wont be tracked for the taxes. This way people might just get government out of money and economic collapse might just happen. But they might have thought through this one already. Hopefully. Otherwise its perfect news.

[Barley Hertog]

I suppose that all these tax exemptions will last until cryptocurrencies become a really global payment method. When you won't have to exchange BTC into fiat to buy smth anymore, countries will have to tax crypto transactions too. So, let's get our benefits while the rules are still quite liberal

[Polipog]

The story basis is more on the good side of bitcoin users, however we don't know the real purpose of the german's government, but if we try to view the economic status of Germany's government, they already belong to economically high level compare to any other contries, and we are hoping that germany government will continue the full support of cryptocurrency operations in their country without any asking of taxes payments so that more and more countries would also followed.

[linshuhow]

What is the rationale of levying a tax on payment? Although there may be tax on profits arising from trading BTC

[Thanasis]

Tax exemption declared by the government would be always amazing thing to hear in first place. I mean people can earn as much as they want online and then go on spending them online or offline as the payment made like that way wont be taxed. So things will look like very cheap for them. But this has to be perfect system as people might just buy crypto currencies and then buy big properties thereof. This could be alarming later on as the rule stays that transaction made as crypto currency wont be tracked for the taxes. This way people might just get government out of money and economic collapse might just happen. But they might have thought through this one already. Hopefully. Otherwise its perfect news.

Yeah you are right if all the people adapts to the crypto currency payment then the government will go bankrupt which result collapse in their country.I think this is just a strategy by the government of Germany to encourage the people to use crypto currencies not just holding maybe later on they will implement the taxes for the crypto too.

[Polipog]

The story basis is more on the good side of bitcoin users, however we don't know the real purpose of the german's government, but if we try to view the economic status of Germany's government, they already belong to economically high level compare to any other countries, and we are hoping that germany government will continue the full support of cryptocurrency operations in their country without any asking of taxes payments so that more and more countries would also followed.

[matuson]

The Germans never make rash decisions. I like that the legislation in respect of bitcoin has moved from a dead point. Perhaps a strong-willed decision has been made in the EU and European countries will set a trend in the crypto economy. Trump wanted an economic war, he'll get it. I'm not sure that America will be the winner.

[debuni]

This could lead to big increase of crypto in EU because now you have to pay 10-40% (country depending) when you are converting to fiat.

Let's hope that now other EU members will follow the German example.

[tanxingwo1215]

Germany is one of the main countries in the eu!

Germany's attitude towards digital cryptographic currency has positive reference for other eu member states.

Digital cryptographic currency can have a good development in Europe, and it is changing European society!

[alyssa85]

But how would they know if someone was using it as a payment or for speculation? Do people have to keep receipts to prove they spent bitcoin as a payment for something?

If I were German I'd claim it was all payments and therefore not be eligible for any taxes on bitcoin at all...

[fokinlipat]

This is a really a good news and I think other countries should also follow this trend. Currently the governments are taking tax on crypto investments because:

1) Some of the governments have got greedy and thus they want to benefit from the increasing acceptance of bitcoins. They are seeing this as an opportunity to increase their yearly income.

2) Some are doing this so as to discourage the investors. They consider bitcoin investments as some type of scam which can harm the investors. Thus they have put huge taxes so that people do not invest money in bitcoins.

[Lucius]

But how would they know if someone was using it as a payment or for speculation? Do people have to keep receipts to prove they spent bitcoin as a payment for something?

If I were German I'd claim it was all payments and therefore not be eligible for any taxes on bitcoin at all...

In Germany tax payment on cryptocurrency is regulated for some time.If you buy BTC and hold it for 1 year or more and then sell-there will not be any tax on capital gains in that case.Also people will not pay any tax if they capital gain is bellow 600 EUR (I assume this applies to the annual period),so people there know how things stand.

I am not sure how they will decide when to people need to pay tax or not,but for me is logical that you not need to pay tax if you buy mobile phone or PC with BTC,but you will pay tax on capital gains if you are buying/selling cryptocurrency only with the intent to make a profit.

I hope others countries in EU will make similar decisions,but it will take time for that.

[Sir Cross]

This would be very advantageous for each crypto-user in the country. Having to pay taxes is a hassle and sometimes discouraging. It's a pain to have to pay some amount from your income which you have worked so hard to earn. Since it is now being treated as a capital gains tax, this is similar whenever you gain some revenue through stocks. That is how it is in my country and I hope that they would impose the same kind of regulation when it comes to cryptocurrencies.

[Morderus]

for me is logical that you not need to pay tax if you buy mobile phone or PC with BTC,but you will pay tax on capital gains if you are buying/selling cryptocurrency only with the intent to make a profit.

Why do you think that paying tax when buying smth isn't logical, globally?