Does a Business selling Bitcoin charge VAT? (I'm not talking about Tax, CGT,etc)

qwertyup23

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Quote from: Superbar365 on June 14, 2018, 05:37:13 PM

So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

Value-Added Tax or VAT is considered to be a form of sales tax. The government imposes VAT only on services, physical goods, and barter exchange or lease of goods in a country. The question on whether or not your sales of bitcoins should be under the scope of VAT is out of the question as bitcoin does not seem to be a tangible product neither to be a form of service.
However, depending upon the laws stipulated in your country, cryptocurrencies in general may be subject to a special kind of tax specifically catering to that aspect only. It is still better that you make research or ask legal advices from lawyers in your country in order to avoid any conflict or anything whatsoever.

It is your duty and obligation to be aware of your current tax laws and that is why I heavily consider that you do your thorough research on the subject matter.

Mahanton

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Quote from: Superbar365 on June 14, 2018, 05:37:13 PM

So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

VAT isnt applicable into crypto or on Bitcoin itself for you to charge up to your potential customers.As being said this would only vary on your own jurisdiction if you applied such thing or not but i believe this would only be just considered to be an interest but not totally considered to be legal stuff. Bitcoin is never been considered as one. If you do have add up charge more way too high compared into traditional crypto exchanger the most likely people would neglect you out and rather buy on exchange itself.

jseverson

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There is no de facto VAT charge on Bitcoin purchases in the US either. It ultimately depends on your jurisdiction though. Here is a resource I've read in the past:

https://payment21.com/blog/how-vat-value-added-tax-bitcoin-handled-different-countries

It covers plenty of countries and cites its references. You're probably better off doing extensive research for your specific jurisdiction though.

audaciousbeing

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Quote from: Superbar365 on June 14, 2018, 05:37:13 PM

So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

VAT in itself means Value Added Tax and this is mostly applicable to companies in the manufacturing sector, packaging businesses, and service businesses who add one value or the other. Aside the government specifically mentioned or the existing law in various jurisdictions are amended to include the sale of crypto currencies, the question you need to ask is "what value are you adding to your crypto currencies acquired over the years and now selling?" If you don't have a valid answer to that, then I don't think you are liable to pay tax.

However, not all businesses in the above category are liable to VAT as some businesses are specifically exempted from paying VAT which I believe sale of crypto would be included in the future because I have not seen companies selling fiat currencies charging VAT.

supermine

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Quote from: Superbar365 on June 14, 2018, 05:37:13 PM

So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

I don't think any countries have VAT for the bitcoin so you can sell your bitcoins if you want and if your country has taxation system then you have to pay accordingly.VAT means Value added Tax so I saw it is only included for the things like elcetronics products mostly and I never saw VAT in currency exchange in my country.Do other country people have?

But if you directly want to sell your bitcoin you can go to exchange or LBC where you don't have any issues like these.

Maclyn19

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It depends on your country's regulation. But I think, it is most likely no because no one will buy bitcoins with added VAT especially we know that in trading it does not add VAT. The additional cost added on top of your bitcoin's price is too big. If I am the customer, I will rather buy directly in binance.

lokanot0

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VAT can only be charged through physical items. Bitcoin is a non-physical item, therefore, it cant be taxed, unless you decided to sell it for a service then it that case it case be charged for service tax.

astrid.uchiha24

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Quote from: Superbar365 on June 14, 2018, 05:37:13 PM

So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

VAT applies only on businesses like if you regularly sells an item or render services, in short your normal operation. I don't think selling BTC would be covered by this law but court can decide if it is vat-able or those in legislative office.

Quote from: avikz on June 17, 2018, 09:49:12 AM

Quote from: Superbar365 on June 14, 2018, 05:37:13 PM

So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

VAT is mainly charged on the physical items which are classified as goods as per applicable law. Since bitcoin is not a physical item, you can consider your bitcoin sell as service. So you ideally charge service tax on bitcoin transactions as per applicable law, instead of charging VAT. Please see the link below to know the key differences between VAT and service tax. I hope this will help you determine the next step more effectively.

https://keydifferences.com/difference-between-vat-and-service-tax.html

depends on the ruling of a country regarding VAT, there are countries that imposes VAt on sale of securities and alike and that is an intangible asset. the primary principle behind VAT is the nature of the business or its primary operation.

buwaytress

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Would help a lot if you would also specify the tax jurisdiction of your business, and if that jurisdiction applies to Bitcoin sold to customers outside your jurisdiction. Though, it should also be pointed out here thaf there is no jurisdiction that applies VAT to your specific case.

It's definitely not the case for UK or for the members of the EU single market. First reply to your post confirms the latter.

avikz

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Quote from: Superbar365 on June 14, 2018, 05:37:13 PM

So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

VAT is mainly charged on the physical items which are classified as goods as per applicable law. Since bitcoin is not a physical item, you can consider your bitcoin sell as service. So you ideally charge service tax on bitcoin transactions as per applicable law, instead of charging VAT. Please see the link below to know the key differences between VAT and service tax. I hope this will help you determine the next step more effectively.

https://keydifferences.com/difference-between-vat-and-service-tax.html

davis196

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Bitcoin is a currency/asset.Buying and selling currencies and other financial transactions are not taxated with VAT.If bitcoin was a product,you would had to charge VAT for selling BTC to customers.
If your BTC was bought with business money,there might be a way to use those expenses for tax deduction purposes.

detector

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My local exchange also apply tax for withdrawal transaction so my government can consider bitcoin exchange as normal business like stock exchange.
If you are not apply tax on bitcoin business, I'm afraid your activity become illegal activities!

Wheelige

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http://curia.europa.eu/juris/document/document.jsf?text=&docid=170305&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=604646: This case suggests that (so long as European law applies to your state) VAT is not added on bitcoin transactions.

Superbar365

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So hypothetically, say I have accumulated over the year 1000 BTC as a business owner. The BTC was bought with business money so its purely owned by the business (No need to get into personal tax issues). I then as the business owner decided to sell some BTC to customers through the business. Do i have to charge a rate of Vat on top of the amount I'm selling to the customer?

Topic: Does a Business selling Bitcoin charge VAT? (I'm not talking about Tax, CGT,etc) (Read 205 times)