The sale of Bitcoin or Litecoin cryptocurrency is exempt from VAT. This applies both to the sale of cryptocurrency generated by the acquisition of the original (finding appropriate recording using a computer with high computing power) and to the acquisition of the secondary by purchasing.
The cryptocurrency phenomenon has been the phenomenon of the last few years. In November 2017 bitcoin course – the most popular cryptocurrency reached price 10,000 USD For the play. seven years before the purchase of pizza for 10,000 Bitcoins. Internet user named Laszlo, who decided to eat this meal, certainly did not realize that he had disposed of something that would reach value in a few years one hundred one million dollars.
As interpreted by the Director of National Tax Information on 3 November 2017 The signature. 0112-KDIL1-3.4012.386.2017.1.KB the sale of such means of payment is exempt from VAT.
The VAT Act defines goods as goods and parts thereof, as well as all forms of energy. For this reason, a cryptocurrency cannot be considered a commodity.
In turn, the service is defined in the VAT Act as a service which does not constitute the supply of goods.
The Director of National Tax Information considered that the sale of cryptocurrency should be regarded as a service provided for payment.
Based on Article 43(1)(7) VAT exempt transactions, including via, on currencies, banknotes and coins used as legal tender, excluding collectors' banknotes and coins.
The Director of National Tax Information referred to the case-law of the Court of Justice of the EU, according to which transactions involving the exchange of traditional currency into the virtual currency ‘bitcoin’ and vice versa are exempt from VAT.
In response to the applicant’s question, the interpretation was considered to be:
„the sale by the Applicant of the units of cryptographic currencies currently held in the form of ‘excavation’ as well as of units purchased through the exchange (Bitcoin and LiteCoin) will constitute a taxable activity for goods and services exempt from tax on the basis of the Article 43(1)(7) Act.’