Customs tax and Bitcoin

[gsan]

So I went to the customs office (in Malta) to get the merchandise I bought online with Bitcoin. They ask for a Paypal receipt (?!) or an invoice. I don't have either of them, but they say they'd accept a printout from the web site's order page. In a hurry I get a print out and hand it. They ask me what BTC is. I blabber something unintelligible to get it over with, but they go and check anyway. They tell me it's Bitcoin and the exchange rate is ~2.99. I pay my customs tax and get my box.

I'm pretty excited about this, and interested in others' similar experiences. Also, I don't know from which source they checked the exchange rate, so what do you think should be the authoritative source for government entities? Which generic sources publish BTC exchange rates?

[Yankee (BitInstant)]

Very cool!

Did they tell you anything else? Give you a hard time?

[gsan]

Did they tell you anything else? Give you a hard time?

Not at all, the lady just raised an eyebrow while saying Bitcoin and went on calculating. The fact that I tried to obscure it and they told me about Bitcoin is actually a shame on my part. I wasn't expecting them to be so cool about it. Though it was obvious that they heard it the first time.

[lonelyminer (Peter Šurda)]

This is good news. It can be used as a precedent in case there are questions about legality of Bitcoin. I presume they took the exchange rate from the time of paying the tax, right? 2.99 EUR / BTC is about what it's now.

[gsan]

I presume they took the exchange rate from the time of paying the tax, right?

Yep, I had to pay more tax than I'm supposed to, though it would be the same for USD, albeit with less volatility.

What I was wondering is, what if they asked me what the rate was? What kind of proof could I've used. At the spot I was pondering about suggesting bitcoinwatch, but it is not a generic source and might not have seemed authoritative (anyone can put up such a website). Would be pretty nice if Google did it. They have Esperanto, why not Bitcoin?

Another question is, if Google decided to support BTC conversions, which source would you suggest they use? Anyone can publish any price they want, and AFAIK no one is bound by law to be transparent about it (not that I think it's necessary, but that would be the first thing a legally responsible entity would ask). For instance, if I was gathering an average value from all exchanges weighted by volume, any one of them could artificially inflate its volume to affect the price. Am I thinking too much?

[cbeast]

I wonder if it's possible to have a price stamp on the block along with the timestamp?

[lonelyminer (Peter Šurda)]

Yep, I had to pay more tax than I'm supposed to, though it would be the same for USD, albeit with less volatility.

Well, I'm not sure here now, but the law probably says that one of the rates (date of purchase, date of import, date of paying VAT) is applicable.

What I was wondering is, what if they asked me what the rate was?

Normally, the rate that is taken is the rate that is published by the central banks (in your case, the ECB), so there's no ambiguity. Since the ECB does not publish "official" exchange rate for Bitcoin, the one prevailing on markets should be used.

Another question is, if Google decided to support BTC conversions, which source would you suggest they use? Anyone can publish any price they want, and AFAIK no one is bound by law to be transparent about it (not that I think it's necessary, but that would be the first thing a legally responsible entity would ask). For instance, if I was gathering an average value from all exchanges weighted by volume, any one of them could artificially inflate its volume to affect the price. Am I thinking too much?

I would use the spot price from the exchanges. Since the volatility is so high, for the purposes of tax calculation probably precedents would have to be set.

Also, after having thought about it for a while, what you paid for probably was not an import levy, but VAT. Most goods imported into EU are not subject to import levies, but almost everything is subject to VAT.

[BTCurious]

Googling BTC didn't give much relevant results, so I suspect they googled 'BTC value', which clearly shows it's bitcoin. The second link is a link to bitcoincharts. It looks pretty legit, and gives a good overview of the prices in different currencies on the front page.

[gsan]

Also, after having thought about it for a while, what you paid for probably was not an import levy, but VAT. Most goods imported into EU are not subject to import levies, but almost everything is subject to VAT.

I guess the amount I paid over its BTC price was VAT. I paid some additional tax on the contents.

EDIT: Yeah, 18% VAT, 3.7% Import Duty, and a minor Excise Duty.

[giszmo]

Also, after having thought about it for a while, what you paid for probably was not an import levy, but VAT. Most goods imported into EU are not subject to import levies, but almost everything is subject to VAT.

I guess the amount I paid over its BTC price was VAT. I paid some additional tax on the contents.

EDIT: Yeah, 18% VAT, 3.7% Import Duty, and a minor Excise Duty.

Did you get a receipt?

[jago25_98]

Hang on, where did they get the 2.99 valuation from?

[gsan]

EDIT: Yeah, 18% VAT, 3.7% Import Duty, and a minor Excise Duty.

Did you get a receipt?

Yes, it even says | Invoice Currency: BTC |.

Hang on, where did they get the 2.99 valuation from?

I wish I queried about it more persistently. Will do the next time...

[Endry333]

У мeня y зaнoкoмoгo былa пoдoбнaя cитyaция, нo peшил чepeз cвязи.
A тaк тoжe зaдaвaли нa тaмoжнe мнoгo вoпpocoв. 

[Basmic]

A very strange approach to pricing. What is the bitcoin exchange rate 2.99? Bitcoin is not recognized currency, therefore, cannot be the official rate. In such cases customs has approved a catalog of prices for goods which do not have a confirmed price. There is chosen similar things and can be assessed under this directory.

[countryfree]

I don't understand. If you change to €, did you effectively paid some 20% tax of the value of what you imported?

I don't see the 2.99 relation between € and BTC. I guess that if I were you I would go back to the customs office and ask for more information. To the best of my knowledge, no European country has any regulation regarding BTC. So, could they have mistaken BTC for another currency?

[Tulen1990]

I'm with everyone else.. how did they get that number?? Although the gesture is very interesting

[ehrz22]

So I went to the customs office (in Malta) to get the merchandise I bought online with Bitcoin. They ask for a Paypal receipt (?!) or an invoice. I don't have either of them, but they say they'd accept a printout from the web site's order page. In a hurry I get a print out and hand it. They ask me what BTC is. I blabber something unintelligible to get it over with, but they go and check anyway. They tell me it's Bitcoin and the exchange rate is ~2.99. I pay my customs tax and get my box.

I'm pretty excited about this, and interested in others' similar experiences. Also, I don't know from which source they checked the exchange rate, so what do you think should be the authoritative source for government entities? Which generic sources publish BTC exchange rates?

Wow, good thing they didnt ask for many documentations. and it's good to know that customs in your country is not that strict. In our country customs will charge high fees for the merchandise, but I still havent tried to buy online using bitcoin. I just hope customs in our country will not hold items if it was bought with bitcoins.

[GreenBits]

I'm with everyone else.. how did they get that number?? Although the gesture is very interesting

Yeah, Im totally at a loss to what happened here LOL. Im thinking some manager made a snap call on this on; what the hell did that arbitrary figure have to do with anything, and under what legal structure are they taxing you uunder, bitcoin is not a product, its data. Dont know if they can tax SaaS.


I would go back there and see what was going on, maybe ask someone to explain your charges. you may not want to stir the pot with this, its probably not worth the return trip. but I feel as though you could probably get your money back if you asked the right person.

[Lieldoryn]

In my country customs rules are not very strict. For goods worth up to $ 500 generally not necessary. All that expensive exempt from customs duty to 10%. It's not a very high price. But there are some products which are under special control of the oligarchs. They keep their monopoly and politicians pay draconian taxes. For such goods, the duty can reach 300-500%.

[HeRetiK]

I don't understand. If you change to €, did you effectively paid some 20% tax of the value of what you imported?

I don't see the 2.99 relation between € and BTC. I guess that if I were you I would go back to the customs office and ask for more information. To the best of my knowledge, no European country has any regulation regarding BTC. So, could they have mistaken BTC for another currency?

I'm with everyone else.. how did they get that number?? Although the gesture is very interesting

Yeah, Im totally at a loss to what happened here LOL. Im thinking some manager made a snap call on this on; what the hell did that arbitrary figure have to do with anything, and under what legal structure are they taxing you uunder, bitcoin is not a product, its data. Dont know if they can tax SaaS.


I would go back there and see what was going on, maybe ask someone to explain your charges. you may not want to stir the pot with this, its probably not worth the return trip. but I feel as though you could probably get your money back if you asked the right person.

This thread is from December 2011, BTC hovered around EUR 3.00,- at that time so it's not an arbitrary figure. The tax was on the imported item, not on BTC.

Still interesting to see government entities treating BTC payments in a sane way as far back as 2011, at least in individual cases. I think the only incorrect call was that the officers apparently chose the BTC price on delivery of the item, not at the time of the sale. Still, not bad for 2011.