The Norwegian Tax Administration changed its stance and declared Bitcoin transactions exempt from Value Added Tax (VAT) this week. Previously, they were not exempt from VAT, and some claim Bitcoin adoption in the country has been stifled due to the high tax rate.
Also read: High Tax Slows Bitcoin Development In Norway
Bitcoin Trade Subject to VAT
In November 2013, the Norwegian Tax Administration issued a statement that bitcoins will be treated as capital property, not a currency, for tax-related purposes. The tax authority found in the case of ‘Bruk av bitcoins – skatte- og avgiftsmessige konsekvenser, supra’ (translates into “usage of bitcoins – tax and fee consequenses”) that:
Any trade in bitcoins is subject to the 25% Norwegian VAT.
EU Considers Bitcoin VAT Exempt
The European Court of Justice (ECJ) ruled in October 2015, however, that Bitcoin exchange transactions are exempt from VAT.
On Monday, the Norwegian Ministry of Finance sent a letter to the country’s Tax Administration, asking them to reconsider their position regarding the Bitcoin VAT.
The letter refers to the EU’s judgment to exempt Bitcoin transactions from VAT obligation under the EU’s VAT Directive and urges the tax authority to follow the ECJ’s decision in their interpretation of VAT. The translated letter reads:
We pray that the directorate makes the necessary adjustments and clarifications to earlier statements about this, so that these are in line with the practice in force in the EU.
Adoption Obstacle Removed
Following the letter by the Ministry of Finance on Wednesday, the Tax Administration changed its stance and ruled Bitcoin transactions VAT-exempt.
The Minister of Finance, Siv Jensen (FRP), commented on the tax authority’s decision that “some have experienced uncertainty about the tax treatment of Bitcoin. I am very pleased that it has now come to a clarification on this question. This safeguards equal treatment and predictability.”
VAT has reportedly slowed Bitcoin adoption in Norway. In December, a board member of the Norway Bitcoin Association, Therese Helland, told Bitcoin.com that local merchant adoption slowed down, and that there was “a largely untapped market within remittance.” At the same time, she named six different exchanges that Norwegians could buy bitcoins from. She noted that:
The main obstacle [for mainstream Bitcoin adoption in Norway] is that there is a 25% VAT being charged for exchanging between NOK and BTC, and this must be removed.
And now it has.
Do you think Norwegian Bitcoin adoption will jump significantly now that bitcoin transactions are exempt from VAT? Let us know in the comments below…
Images courtesy of Shutterstock and Norwegian Ministry of Finance
Bitcoin.com is the most unique online destination in the bitcoin universe. Buying bitcoin? Do it here. Want to speak your mind to other bitcoin users? Our forum is always open and censorship-free. Like to gamble? We even have a casino.
The post Bitcoin Transactions Declared VAT-Exempt in Norway appeared first on Bitcoin News.
Bitcoin Transactions Declared VAT-Exempt in Norway