Good news regarding Bitcoin and VAT in Sweden

[D.H.]

This is related to the thread Bitcoin and VAT in the EU but I think that it deserves its own thread. About a year ago I requested an advance ruling from Skatterättsnämnden (“the tax board”?) in Sweden regarding Bitcoin and VAT. An advance ruling in this case means that their decision is legally binding for the tax agency in Sweden (“Skatteverket”) and a general administrative court (“allmän förvaltningsdomstol”) if the applicant wants to use it. The case that I presented was that I would be buying bitcoins from an exchange (e.g. Mt.Gox) and then sell them on to Swedish customers. Last week I finally received their decision and it was good news!

First of all, they state that exchanging between regular currency and Bitcoin does not imply consumtion, i.e. Bitcoin is not treated as a good or a service, so there is no VAT on bitcoins themselves. With regards to VAT it is treated as any other currency.

Second of all, they reach the decision that the service that I provide is also excempt from VAT, i.e. there should be no VAT added to the commission that I would take.

I have written about this in Swedish on bitcoin.se with some quotes from the ruling but it is hard for me to translate the legal stuff to english. I only have it on paper right now but the ruling will be public on the homepage of Skatträttsnämnden, hopefully later this week.

[prophetx]

woah congrats on getting this done

[Technomage]

This is indeed good news. We've also seen developments on the taxation side in Finland. As far as I understand, this is also the case in Finland, so no VAT when selling bitcoins. Right now we're looking at selling bitcoins with a Bitcoin ATM without any VAT. Fees can be included in the exchange rate and no VAT required at all. This is a very positive development.

[btceic]

Great news! Thank you for sharing it with us!

[Ente]

Wow, indeed good news, and great work!

In Germany, you can't simply buy and sell bitcoins as sort of a business, you would need to get a (money transmitter? "banking"?) licence for this. Buying and selling for your private, personal needs is all fine (and income-taxable if not held for one year minimum).
I didn't follow this for other countries, how about exchanging bitcoins on a professional scale in Sweden and Finland? Would you need a licence? Or is "I pay taxes on my profit" all you need to do?

Ente

[D.H.]

In Germany, you can't simply buy and sell bitcoins as sort of a business, you would need to get a (money transmitter? "banking"?) licence for this.
[...]
I didn't follow this for other countries, how about exchanging bitcoins on a professional scale in Sweden and Finland? Would you need a licence?

In Sweden you need to register with "Finansinspektionen" but it's not that expensive. 24 000 SEK (~2700 EUR) to register if you are a company, 11 000 SEK if you're an individual. You then pay 10 000 or 2 000 SEK each year.

And you need to follow AML/KYC rules.

[evoorhees]

Great work

[hazek]

Awesome job.

[Swordsoffreedom]

Wait this is real news
Thanks for the update

[icem3lter]

Definitively good work, worth the one year waiting.
Thank you for your effort. Now if it work this way in Sweden only, or the whole EU...

[minorman]

This is really great!
Until the Danish tax people get their act together we here in DK now have this example to point to in Sweden. 

[Ente]

In Germany, you can't simply buy and sell bitcoins as sort of a business, you would need to get a (money transmitter? "banking"?) licence for this.
[...]
I didn't follow this for other countries, how about exchanging bitcoins on a professional scale in Sweden and Finland? Would you need a licence?

In Sweden you need to register with "Finansinspektionen" but it's not that expensive. 24 000 SEK (~2700 EUR) to register if you are a company, 11 000 SEK if you're an individual. You then pay 10 000 or 2 000 SEK each year.

And you need to follow AML/KYC rules.

Thank you for the info.
Sweden? Awesome!

Ente

[Rassah]

I shall be shopping at IKEA in your honor good sir! 

Congrats!

[al.matic]

Soo, what happens if one EU country treats bitcoin like currency and another like commodity, gift card or whatever. I mean, the EU is a single VAT area (or something similar, meaning only  the rates are different)? Do I have to open a company in Sweden to do business in EU ( just using bitcoin for payments, not doing banking, exchanges or brokerage)?

[ninjaboon]

I shall be shopping at IKEA in your honor good sir! 

Congrats!

I would like to shop at IKEA and pay at the checkout with Bitcoins some day.

[KSV]

Excellent news! Keep up the great work and thank you for your service to the community

[klausbl]

First of all, they state that exchanging between regular currency and Bitcoin does not imply consumtion, i.e. Bitcoin is not treated as a good or a service, so there is no VAT on bitcoins themselves. With regards to VAT it is treated as any other currency.

Second of all, they reach the decision that the service that I provide is also excempt from VAT, i.e. there should be no VAT added to the commission that I would take.

I only have it on paper right now but the ruling will be public on the homepage of Skatträttsnämnden, hopefully later this week.

Great work and great news! As you might have read in the Scandinavian sub-forum we (Justcoin) received a similar answer from the Norwegian tax agency in August, followed by a withdrawal of their statement earlier this month. Both the original statement concluding trading in Bitcoin is exempt taxation and the withdrawal of this statement can be found here.

I am interested in getting in touch with you and possibly receive a copy of the documentation you have received from Skatterattsnamnden? It could be highly useful as a precedent when speaking to the Norwegian tax agency. My mail is klaus@justcoin.com.

[D.H.]

The ruling is now available on the homepage of Skatterättsnämnden (in Swedish only, sorry). Apparently Skatteverket ("the tax authorities", "IRS") has appealed the decision which means that it will be tried in Högsta förvaltningsdomstolen ("Supreme Administrative Court"). My contact said that she doesn't know how long this will take and it might even be brought up to the EU court in which case it will be a long time until I have a final decision.

[caveden]

Apparently Skatteverket ("the tax authorities", "IRS") has appealed the decision

Do you know what exactly are they appealing for?
It is to be able to tax commissions earned by exchanges as if it was a taxable service, or is it because they want bitcoins units themselves to be subject to VAT like a consumption good?
The former would be bad, but well, it's just the same think for every kind of service. But the latter is much more catastrophic.

[D.H.]

Do you know what exactly are they appealing for?
It is to be able to tax commissions earned by exchanges as if it was a taxable service, or is it because they want bitcoins units themselves to be subject to VAT like a consumption good?
The former would be bad, but well, it's just the same think for every kind of service. But the latter is much more catastrophic.

Sorry for the slow response. I received the appeal in the mail today and I have just skimmed through it but it seems to be about the commission. Skatteverket writes that they would like the Supreme Administrative Court to get a decision from the EU court to clarify this. So I guess that it will take a while but if we get a decision from the EU then that's a good thing, not only for Swedes.