FINLAND ON ITS WAY TO MAKE BTC A CURRENCY

[coinmaster222]

Finnish regulators have classified bitcoin as a financial service, thus granting it VAT-exempt status.

The Finnish Central Board of Taxes (CBT) judged bitcoin to be a financial service in ruling 034/2014, which states that bitcoin purchases qualify as “banking services” under the EU Value Added Tax (VAT) Directive.

The ruling was issued after a court classified bitcoin as a payment instrument and sets Finland’s approach to the cryptocurrency apart from most European jurisdictions, which generally treat bitcoin as a commodity.

However, the nation is not completely alone in taking this approach: Belgium’s Federal Public Service Finance (FPS) issued a similar ruling in September.

What does this mean for Finland?

Richard Asquith, vice president of global tax compliance at Alavara, told the International Tax Review that Finland’s ruling could help change the way bitcoin is viewed domestically.

“By making bitcoins a recognized payment instrument, Finland has pushed it towards being regarded as a formal currency," said Asquith.

He warned, however, that the decision, in the absence of EU-wide regulations, could cause more regulatory problems:

[kuverty]

I will clarify this ruling a bit.

The ruling was about brokerage fees. It was determined that a bitcoin exchange does not have to pay VAT on the brokerage fees it receives, as bitcoins were considered a payment instrument, in the context of value added taxation. Hence, such brokerage fees were fees for providing financial intermediation services as defined by the Finnish law and VAT exempt by the same law, and also VAT exempt according to a EU council directive. "Member States shall exempt the following transactions: [...] transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection". The directive is available online, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:347:0001:0118:en:PDF (article 135, 1d).

Nothing was said about banking except in the article quoted in this thread. But yes, it did in this case, recognize bitcoins as a payment instrument. But the Finnish tax office has already, before this, published a guide on the taxation of what it calls "virtual currencies", making a distinction between mining income and capital gains from the rise in bitcoin's value. So they are pretty aware of Bitcoin.

[thms]

[Addition]

lol, best .gif I've seen for a while, good find thms!

[Argwai96]

LOL Although I don't think this gif is exactly accurate, it is very funny.

This does not appear to be treating bitcoin any differently then the US government treats it for tax purposes