The State of New York’s tax authorities have announced that there will be no VAT on the purchase of Bitcoins. In a memorandum on December 5th they stated that since Bitcoin is considered as an ”intangible asset”, no VAT is payable on its purchase. However, if the crypto currency is used to purchase a product or service, VAT is due on this product and/or service.
The memorandum also stated that making a purchase with Bitcoin or other crypto currencies, is considered as a barter transaction by the tax authorities. At the time of the purchase VAT is due on the product’s value in dollar.