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Germany: Ministry of Finance on the Tax Treatment of Virtual Currencies

On February 27, 2018, the federal Ministry of Finance in Germany published document no. 2018/0163969 in reference to the treatment of Bitcoin and other so-called virtual currencies for tax purposes, following the judgment of the Court of Justice of the European Union (CJEU) (C-264/14).

By virtue of the said judgment it was decided that the exchange of traditional currency for units of Bitcoin virtual currency and vice versa is considered as service provision against a remuneration fee that falls under the scope of Article 2(1)(c) of Council Directive 2006/112/EC(VAT directive); thus, it is also exempted under Article 135(1)(e) of the same directive.

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