Germany will not tax the cryptocurrency to pay for goods and services

Germany will not tax the cryptocurrency to pay for goods and services

The Federal Ministry of Finance of Germany stated that it will not impose Bitcoin tax if it is used as means of payment.

The decision was published on 27 February. In the document, the Ministry refers to the judgment of the European court of 2015, which creates precedent for all member countries of the European Union.

The judgment States that cryptocurrencies are considered a legitimate method of payment:

“The so-called virtual currencies (cryptocurrencies such as bitcoin) are equal to legal means of payment, if these virtual currency has been accepted as an alternative and contractual methods of payment the parties involved in the transaction, and have no purpose other than use as a payment method”.

According to this decision, the conversion of Bitcoin into Fiat currency or Vice versa is a “taxable benefit”. However, for payment of goods this statement does not apply. In accordance with this provision, operators of cryptocurrency exchanges can also receive tax benefits, “if they complete the purchase and sale of Bitcoin as a mediator on his behalf”.

The court decision also stated that the profits from mining will not be taxed as the payments are made on a voluntary basis.

These guidelines distinguish Germany from the US, where the IRS (IRS) treats bitcoin as property, which means that each purchase by means of digital assets is technically considered a sale of the property and thus is taxable on capital gains.

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