The Federal Ministry of Finance of Germany considers that Bitcoin (Cryptocurrency) will not be taxed as long as it is used as a means of payment. The report was released via Cointelegraph uf Deutsch on Thursday, March 1st. German federal authorities issued its decision not to impose a tax on purchases using Bitcoin and other cryptocurrencies on February 27, citing the European Court's decision in 2015, which sets a precedent for all EU members.

Cryptocurrency Includes Legal Payment Facilities.

The court justified its tax decision by stating that they regarded crypto as a means of legal payment: "The so-called virtual currency (cryptocurrencies such as Bitcoin) is considered to be the same as a legal payment instrument, as long as the so-called virtual currency has been accepted as an alternative and contractual payment instrument by the parties involved in the transaction and has no other purpose than to use as a tool payment."

According to the decision, the conversion from cryptocurrency to fiat or otherwise is classified as other tax-exposed services. Therefore, the parties acting as intermediaries of this exchange shall not be taxed. Under this provision, cryptocurrency exchange operators may also obtain tax exemptions, if they complete the purchase and sale of Bitcoin as an intermediary on their own behalf.

The court's decision also noted that the cost of miners will not be taxed, as the payment is voluntary. These guidelines distinguish Germany from the US where the Internal Revenue Service (IRS) treats properties such as Bitcoin, which means that any purchase using Bitcoin is technically considered a sale of property and therefore subject to a capital gain tax.

Germany itself considers that the use of Bitcoin must be aligned with the use of conventional payment instruments, insofar as there is no purpose other than pure payment instruments. While the US treats cryptocurrency as a property so far used as a transaction in any form, even used to buy groceries, a tank of gasoline for cars, or even buy pizza.

However, the main concern regarding the use of bitcoin for daily payments in Germany should be used as a pure payment instrument and not a speculative tool used for trading and profits. Having created explicit tax-exposed relevance of bitcoin as an exclusive exchange medium.

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