Europe says bitcoins don’t attract VAT

cashA ruling from the European Court of Justice today said that bitcoins and equivalent to banknotes and other forms of money and don’t attract value added tax (VAT).

Sweden put in a request for legal clarification because the taxman there said bitcoin shouldn’t be exempted from VAT.

But the court ruled that bitcoins are a method of payment and so were exempt under a European directive.

A report in Reuters said the court said “[bitcoin] transactions are exempt from VAT under the provision concerning transactions relating to currency, bank notes and coins used as legal tender”.