2013-12-15 Bloomberg - Bitcoins Fail Real Money Test In Scandanavia's Wealthiest

[OleOle]

http://www.bloomberg.com/news/2013-12-12/bitcoins-fail-real-money-test-in-scandinavia-s-wealthiest-nation.html

Bitcoins were dealt a blow in Norway as the government of Scandinavia’s richest nation said the virtual currency doesn’t qualify as real money.

[bryant.coleman]

Most of the rulers and parliamentarians in Sweden and Norway are females. And females tend to think conservatively (esp. in financial matters).

[aigeezer]

Contrary to the headline, BTC did not fail a real money test. Rather, some politicians expressed the opinion that BTC is not real money. Big difference, imho.

Parallel example, based on a garbled quotation attributed to Lincoln (who referenced a calf):

Q: If you call a dog's tail a leg, how many legs does a dog have?

A: Four. Calling something a leg does not make it a leg.

In the case of BTC, I suggest:

Q: If the populace uses BTC as real money, but the politicians declare it is not, then is BTC real money?

A: Yes, politicians routinely express false views about many things. BTC is what it is, regardless of anyone's opinions.

[Gabi]

Lol at the term 'real money', scandinavia government truly sucks. Who cares about their opinion about what is real and what is not? What matters is what WORKS

https://en.wikipedia.org/wiki/No_true_Scotsman

No true Scotsman is an informal fallacy, an ad hoc attempt to retain an unreasoned assertion.[1] When faced with a counterexample to a universal claim ("no Scotsman would do such a thing"), rather than denying the counterexample or rejecting the original universal claim, this fallacy modifies the subject of the assertion to exclude the specific case or others like it by rhetoric, without reference to any specific objective rule ("no true Scotsman would do such a thing").

[LiteCoinGuy]

Norway will instead treat Bitcoins as an asset and charge a capital gains tax, after Germany in August said it will impose a levy on the virtual currency.

sounds ok for me.

[aigeezer]

Norway will instead treat Bitcoins as an asset and charge a capital gains tax, after Germany in August said it will impose a levy on the virtual currency.

sounds ok for me.

Not for me - it's just one more arbitrary tax grab, and it stretches the definition of "asset" beyond recognition. I suppose the good side is that it will push people even further away from converting crypto to fiat.

[Barek]

In Norway, profits from Bitcoin will fall under the wealth tax and losses can be deducted, Holte said. There will be a 25 percent sales tax that applies to businesses, he said.

That is pretty standard. What exactly would be different if it was classified as currency? Completely tax free profits? I am sure the 25% VAT would stay either way.

Wasn't there something about sales tax on the sale of bitcoin in Norway (as absurd as that may sound)? So this ruling is actually a step forward.

[StarfishPrime]

Norway will instead treat Bitcoins as an asset and charge a capital gains tax, after Germany in August said it will impose a levy on the virtual currency.
sounds ok for me.

Pretty much the same stance as being adopted in Canada, UK, US etc. from what we've seen so far. Capital gains would also apply to foreign currencies, precious metals etc. in many countries, so asset vs. currency is a disctinction without much of a practical difference in many cases.

[bryant.coleman]

Norway will instead treat Bitcoins as an asset and charge a capital gains tax, after Germany in August said it will impose a levy on the virtual currency.

sounds ok for me.

Capital gains tax in Norway is around 35%. It is way too high, compared to that in Germany. I don't think that BTC owners are happy with this in Norway.

[Grinder]

Capital gains tax in Norway is around 35%. It is way too high, compared to that in Germany. I don't think that BTC owners are happy with this in Norway.

It's 28% this year and 27% next year, which is the same as it would be if bitcoins were called money. The big problem is that they are calling bitcoins a service, and also talks about adding the Norwegian equivalent of value added tax. They don't clarify what this means, and worst case it means that sellers of bitcoins with a turnover of more than NOK 50 000 will have to add 25% tax to the sum (because they would be selling a service). It is of course ridiculous if this is correct, but unfortunately that hasn't stopped them before.

What the optimists hoped for was for bitcoins to be included by an exception which lets private individuals avoid the 28% tax on smaller amounts of cash. This exception was made to avoid reporting tiny gains or losses on cash left over from holiday trips etc.

[bryant.coleman]

The big problem is that they are calling bitcoins a service, and also talks about adding the Norwegian equivalent of value added tax. They don't clarify what this means, and worst case it means that sellers of bitcoins with a turnover of more than NOK 50 000 will have to add 25% tax to the sum (because they would be selling a service). It is of course ridiculous if this is correct, but unfortunately that hasn't stopped them before.

So if I want to buy Bitcoins worth $1,000 I will have to pay some $1,250 (1,000+ 25%) ?

That is definitely ridiculous. The Norwegian parliamentarians has gone nuts.