LUXEMBOURG: The EU’s top court ruled on Thursday that the exchange of Bitcoin and other virtual currencies should be treated just like traditional money in Europe and not incur any sales tax.

According to EU law, all transactions relating to currency, bank notes and coins used as legal tender across the 28-nation bloc are exempt from value-added tax (VAT).

In court, Swedish authorities argued that because it was not a real currency, Bitcoin did not meet the EU’s tax free standard. But the Luxembourg-based European Court of Justice disagreed.

“The court... holds that those transactions are exempt from VAT under the provision concerning transactions relating to ‘currency, bank notes and coins used as legal tender’,” it said in a statement.

The decision will be welcomed by Bitcoin’s backers who say virtual currencies provide an efficient and anonymous way to store and transfer funds online.

Published in Dawn, October 23rd, 2015

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