Cross Border VAT Advisors
VAT treatment of virtual currencies and transactions – GERMANY
VAT on Cryptocurrency. German Tax Advice. Tax Advice for crypto-assets and Bitcoin.
On 27th February 2018, the Germany‘s Federal Ministry of Finance (MOF) issued guidance clarifying the VAT treatment of bitcoins and other “virtual currencies” by confirming that the German Tax Authorities will not impose VAT on cryptocurrency which is used as a form of payment.
It determined that although transactions to exchange a traditional currency for a virtual currency and vice versa were deemed to be a “taxable supply” these transaction are considered to be VAT exempt.
The guidance confirms that Germany will not impose a VAT charge in circumstances where the virtual currency is a substitute for a traditional currency and is used merely as a form of payment.
This guidance is in line with the ruling of the Court of Justice of the European Union (CJEU)— Hedqvist (C-264/14, 22nd October 2015).
For further information, please click the following links:
https://curia.europa.eu/juris/liste.jsf?num=C-264/14
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.