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Germany’s NO Tax policy on Bitcoin Payments

Germany’s Ministry of Finance has announced it will not tax people for using cryptocurrency or so called virtual currency (e.g. Bitcoin) as a means of payment, coindesk reported.

The nation will see Bitcoin as identical to legitimate tender for tax purposes when utilized as a type of payment.

A document issued by the ministry expressed that like fiat cash, digital money purchases would be liable to standard VAT rules.

“Virtual currencies (cryptocurrencies, e.g., Bitcoin) become the equivalent to legal means of payment, insofar as these so-called virtual currencies of those involved in the transaction as an alternative contractual and immediate means of payment have been accepted.”

German cryptocurrency miners will not be taxed, while exchanges operating as a technical marketplace will be liable to taxes.

However, as per the European Union ruling, the act of converting a cryptocurrency to fiat or vice versa is classified as a “supply of services,” and therefore a party acting as an intermediary for the exchange will not be taxed.

The decision stands in contrast to the US, where Bitcoin purchases are considered a sale of the property.

 

 

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