The European Court of Justice have ruled, after a dispute in a Swedish Court, that the trading of digital currency is exempt from VAT including the exchange for real currency. This ruling applies to the whole of the European Union and will force some member states to change how they treat transactions involving virtual currency. HMRC previously made the decision not to levy tax in relation to bitcoin trading in 2014 so the application of the law will not need to be reconsidered in this country. However, as the decision has now been made to enforce this throughout every Member State, some, such as Germany, will be required to adopt the same legal treatment. Although cryptocurrencies are exempt for VAT, they are still liable to other taxes. If you have any queries about the evolving nature of the treatment of digital currency, please call our free helpline for advice.
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