Germany Slacks Off On Bitcoin Taxation
Germany is setting the pace within official European Union economies to slack off on regulations concerning Bitcoin. Included in this new tax exemption is the taxation on the digital asset as a medium of payment, miner rewards also enjoy from this slow regulation in addition to some digital currency exchanges.
Germany’s Federal Ministry of Finance, Bundesministerium der Finanzen released a document stating its tax decision with regards to bitcoin, VAT treatment if Bitcoin and other cryptocurrencies. Taking inspiration from the 2015 value added tax (VAT), the wider EU is of the opinion that control the development events of bitcoin and Germany has decided to make use of the same structure.
Although it comes with strict conformity according to the law, the document claims bitcoin as a legal tender when a means of payment, hence excluding it from the usual usage tax. This implies that the use of bitcoin as a payment cannot be tracked. The fee for bitcoin transaction is usually determined by the service provider which is aligned with the country in which the transaction is occurring.
When you translate bitcoin from the digital currency point of view into euros, for instance, it means it is not taxable event based on the document. This is thanks to the fact that bitcoin is used as a legal tender. VAT will determine the cost for bitcoin transactions in addition to all other business dealings. All payment fees made to the digital wallets are also taxable.
But going through what mining entails, the document reaches the final point that the work of miners is not taxable transactions. The alleged transaction fee that miners of other users of the system is not a compulsory payment and is not based on the success of miners.
Additionally, the payment with regards to accepting new bitcoin by the system is not regarded as a form of payment for the miners and this makes it non-taxable.
Based on the dictates of “trading platforms,” the provider of a trading programs its website as a technical trading location to gain or exchange bitcoin to other users are liable to tax, as the documents do not favor an exemption for this. However, there is only an exception when the service provider of the platform, the exchange and sale of bitcoin as an Intermediary is made in his own name.
