European VAT case highlights growing use of Bitcoin

Abstract

Bitcoin is all around us. You can use it to purchase goods online and even withdraw it from automated teller machines (ATMs). Recently, the European Court of Justice (ECJ) released its judgment in the case C-264/14 Skatteverket v David Hedqvist related to the VAT liability of the trade in virtual currencies such as Bitcoin. As VAT is a transaction tax, levied on the consumption of goods and services acquired in exchange for a consideration, such as Bitcoin, let's have a look at the VAT treatment of various activities when dealing with Bitcoin: