Bitcoin is not subject to VAT taxation in Germany when used as a payment method

posted 4 months ago
Germany won't tax Bitcoin users for using the cryptocurrency as a means of payment, the Ministry of Finance has said.

The guidance, published Tuesday, sets Germany apart from the U.S., where the Internal Revenue Service treats Bitcoin as property for tax purposes - which means that if an American buys a cup of coffee with Bitcoin, it's technically considered a sale of property and potentially subject to capital gains tax.

Instead, Germany will regard Bitcoin as the equivalent to legal tender for tax purposes when used as a means of payment, according to a new document.

Notably, the new German document justified its tax decisions by regarding cryptocurrencies a legal method for payment, stating:

"Cryptocurrencies, eg. Bitcoin, becomes the equivalent to a legal means of payment, insofar as these virtual currencies are an alternative contractual, immediate, and acceptable means of payment."
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