Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin now 'unit of account' in Germany

theguardian.com

Post reply on HN
Print view View original

11–20 of 39 posts

Re: Bitcoin now 'unit of account' in Germany

#11

Post by celticninja »

benmmurphy wrote: post #2

that seems weird that germany has to recognize bitcoin as a unit of account to collect taxes on it. surely, if you buy something and then later sell it in the future for a profit you are liable for capital gains on it. surely there is not some massive whitelist of all the goods that attract capital gains tax.

not necessarily. If i buy a collectable trading card or spiderman comic and keep it for 3 years then decide to sell it, it usually will not attract capital gains tax. I am not equating bitcoin to collectables but the precedent is there. Additionally they (German govt/tax authorities) recently advised that you would be liable for capital gains tax on bitcoin profits if you held the bitcoins for less than 12 months, held for over 12 months and you do not have to pay tax on any gains. This appears to be in line with that earlier announcement.

Re: Bitcoin now 'unit of account' in Germany

#12

Post by celticninja »

TomGullen wrote: post #8
effn wrote: post #5

Earlier quoted context omitted.

VAT is never charged on assets (which Bitcoin is), only goods and services.

Here in the UK Bitcoins are treated as an electronic service. This means once you're registered for VAT (and you must past ~£70k revenue) you have to charge VAT on sales to: - Anyone in the UK - Individuals in the EU And: - Reverse charge VAT to business in the EU Having to charge VAT on Bitcoins is a show stopper if you're intending to sell them unless you close your doors to EU customers. Bitcoins need to be classe…

No they are not.

There is no official stance on bitcoin by the UK government, or tax authorities. VAT is not chargeable on bitcoin transactions. There was one gy who was advised by his accontants that he should be charging VAT but that was not a legal requirement, more his accoutnants taking a very risk averse position, that way if VAT was ever brought in on bitcoin he would not get an unexpected VAT bill.

There are There are also some goods and services that are 2 types of 'exemption' to VAT:

* exempt - so no VAT is charged on them

* outside the scope of the UK VAT system altogether

Bitcoin is outside the scope of VAT entirely and it would require the tax man/govt making a declaration on bitcoin as to how it is treated under VAT rules. This has not happened, therefore VAT is not applicable to bitcoin.

Re: Bitcoin now 'unit of account' in Germany

#13

Post by [deleted] »

celticninja wrote: post #12
TomGullen wrote: post #8

Earlier quoted context omitted.

Here in the UK Bitcoins are treated as an electronic service. This means once you're registered for VAT (and you must past ~£70k revenue) you have to charge VAT on sales to: - Anyone in the UK - Individuals in the EU And: - Reverse charge VAT to business in the EU Having to charge VAT on Bitcoins is a show stopper if you're intending to sell them unless you close your doors to EU customers. Bitcoins need to be classe…

No they are not. There is no official stance on bitcoin by the UK government, or tax authorities. VAT is not chargeable on bitcoin transactions. There was one gy who was advised by his accontants that he should be charging VAT but that was not a legal requirement, more his accoutnants taking a very risk averse position, that way if VAT was ever brought in on bitcoin he would not get an unexpected VAT bill. There are…

[deleted]

Re: Bitcoin now 'unit of account' in Germany

#14

Post by celticninja »

[deleted] wrote: post #13
celticninja wrote: post #12

Earlier quoted context omitted.

No they are not. There is no official stance on bitcoin by the UK government, or tax authorities. VAT is not chargeable on bitcoin transactions. There was one gy who was advised by his accontants that he should be charging VAT but that was not a legal requirement, more his accoutnants taking a very risk averse position, that way if VAT was ever brought in on bitcoin he would not get an unexpected VAT bill. There are…

[deleted]

A HMRC technical expert sounds very vague, also they (the technical expert) do not have the authority to apply VAT to an item. VAT laws are very proscriptive that is why when they add VAT (or change the rate) to e.g. hot foods, it is done through the budget by government and not by HMRC. That is why M&S were involved in a long running battle with HMRC over VAT on teacakes (the marshmallow/chocolate kind) or why Jaffa cakes dont have VAT on them (big legal case to prove they are cakes (VAT exempt) and not chocolate biscuits (not VAT exempt).

PS. the reason a jaffa cake is vat exempt is because when it goes stale it goes hard (like a cake) whereas a biscuit goes soft.

If you are actually concerned about this ask for something in writing that specifically states they are not exempt from VAT and at which rate VAT is applied to them. I am willing to bet that they will not provide an official document that shows VAT is applicable because no offical detrmination has been made. If it had it would have been significant news in the bitcoin world especially amongst UK users.

Re: Bitcoin now 'unit of account' in Germany

#15

Post by celticninja »

TomGullen wrote: post #8
effn wrote: post #5

Earlier quoted context omitted.

VAT is never charged on assets (which Bitcoin is), only goods and services.

Here in the UK Bitcoins are treated as an electronic service. This means once you're registered for VAT (and you must past ~£70k revenue) you have to charge VAT on sales to: - Anyone in the UK - Individuals in the EU And: - Reverse charge VAT to business in the EU Having to charge VAT on Bitcoins is a show stopper if you're intending to sell them unless you close your doors to EU customers. Bitcoins need to be classe…

I see you deleted your reply, I hope that does not prevent you from seeign that i did reply to it.

Re: Bitcoin now 'unit of account' in Germany

#16

Post by derefr »

I wonder how Germany expects to be able to tax this? It's very hard to audit someone's collection of BTC wallets. Will this only be to require companies to collect VAT for BTC transactions, or will it also include, say, income tax when you're being paid in BTC?

Re: Bitcoin now 'unit of account' in Germany

#17

Post by ryusage »

derefr wrote: post #16

I wonder how Germany expects to be able to tax this? It's very hard to audit someone's collection of BTC wallets. Will this only be to require companies to collect VAT for BTC transactions, or will it also include, say, income tax when you're being paid in BTC?

I don't really see why it would be any different from taxing a cash currency?

Re: Bitcoin now 'unit of account' in Germany

#18

Post by agilebyte »

derefr wrote: post #16

I wonder how Germany expects to be able to tax this? It's very hard to audit someone's collection of BTC wallets. Will this only be to require companies to collect VAT for BTC transactions, or will it also include, say, income tax when you're being paid in BTC?

A company pays for work done in BTC. They want to put that into their books as an expense to reduce their tax burden. The other party that did the work is now on record and can be taxed also.

Re: Bitcoin now 'unit of account' in Germany

#19

Post by walden42 »

cs702 wrote: post #4

Germany is acting very logically in response to Bitcoin. Their thinking: "if a growing number of people are using it as a store of value or medium of exchange, or as a vehicle for financial speculation, let's regulate and tax its use." This bodes well for Bitcoin, because other countries are likely to follow Germany's example.

> However, companies wanting to use it for commercial transactions would need permission from the Federal Financial Supervision Authority.

That's not a good thing for bitcoin, though, or for the free market in general. One of the main ideas behind bitcoin is its ease of use compared to exisiting methods. The more regulations and limitations imposed on it, the more it becomes like everything else, in terms of ease of use.

Re: Bitcoin now 'unit of account' in Germany

#20

Post by andylei »

ryusage wrote: post #17
derefr wrote: post #16

I wonder how Germany expects to be able to tax this? It's very hard to audit someone's collection of BTC wallets. Will this only be to require companies to collect VAT for BTC transactions, or will it also include, say, income tax when you're being paid in BTC?

I don't really see why it would be any different from taxing a cash currency?

its actually easier! there's no block chain for paper money
Post reply on HN