It looks like Bitcoin keeps making waves of progression in The Netherlands. Not only do they have amazing project such as Arnhem Bitcoinstad, which could soon be followed by Amsterdam Bitcoinstad , but it looks like Bitcoin will not be taxable, according to a Ministry of Finance representative.
DISCLAIMER : Before you get your hopes up too high, none of the following has been made official just yet. All of these statements and all the information is coming from a Ministry of Finance representative taking part in a Bitcoin debate at the Free University of Amsterdam on November 20th 2014.
Now that we got that disclaimer out of the way, let’s see what this representative, who goes by the name of Jakob Kamminga, had to say during the Bitcoin debate: “By the looks of things right now, Bitcoin will most likely not be subject to any taxes or VAT in The Netherlands.”
A very exciting sentence, but I do feel it is important to stress one critical part where Mr. Kamminga says “most likely”. While nothing is set in stone as of this writing, and people could be optimistic upto a certain degree, he is leaving the door open for an entirely different result when push comes to shove.
However, if this statement would be an indication of the Ministry of Finance’s official ruling, things are looking very good fro Bitcoin adoption and awareness in The Netherlands. Such a decision has a lot more ramifications than just cashing out a Bitcoin to fiat currency to pay your bills.
Look at it from a merchant’s perspective for example. Bitcoin payments wouldn’t be subject of VAT either, distinguishing the purchase of an item or service from “just a trade with virtual currency”. A ruling like that would be incredibly beneficial to both parties for one simple reason.
And that simple reason is this : neither the purchased product nor the Bitcoins used to pay for the transaction are subject to VAT. Furthermore, this prevents customers from The Netherlands for being flagged as VAT-eligible entrepreneurs while using Bitcoin as a payment method.
While all of this sounds absolutely amazing, there is still plenty of work to be done on the legislative side. Especially in regards to how the Ministry of Finance wants to deal with professional Bitcoin merchants , a lot of questions still need to be answered.
But let’s assume the outcome of the legislation will be rather positive for merchants as well, The Netherlands could become an even bigger Bitcoin hotspot for Europe and the rest of the world. Imagine if a Bitcoin exchange based in The Netherlands would never have to pay VAT. The same could be said for Bitcoin day traders, who would no longer be subject to VAT on their earnings.
The Netherlands would not be the first country to exempt Bitcoin transactions from VAT however. Countries such as the United Kingdom and Finland have already deemed Bitcoin transactions exempt of any VAT. Europe definitely seems to be leading the Bitcoin revolution on that front!