Bitcoin transactions will "probably" be not liable for value added tax (VAT), according to Jakob Kamminga, an official from the Dutch Ministry of Finance.
His comments were made during a debate on bitcoin and tax at VU University, Amsterdam, on Thursday.
This would mean that purchases with bitcoin will only be taxed on the goods and services side of the transaction, as is the case with fiat currency – not on both sides of the transaction, as is the case with barter transactions.
When asked about the statement, Kamminga's spokesperson at the Ministry of Financebito, Adriaan Ros, told CoinDesk:
He indicated that this is based on the notion that such exemptions apply to payments instruments, which, if the term is interpreted broadly, may include payments in bitcoin.
Ros continued: "It should be noted that these are preliminary and conceptual thoughts, however, that are yet to take shape and will need to be submitted through the usual routes, in which we will seek commentary from businesses and tax advisors. This happens by default in all policies in the field of taxation that are to be published.”
Reactions from the community
Although Kamminga's remarks did not represent official statements by the ministry, they are considered a step in right direction by many in the Dutch bitcoin community.
“This certainly seems like good news,” said Roger van de Berg, a tax lawyer at Baker & McKenzie and one of the speakers at the debate.
While it's still somewhat unclear whether the VAT exemption would only apply to private individuals or commercial activities undertaken by brokerages, exchanges and professional day-traders as well, it seems that the Ministry of Finance is also considering a VAT exemption for businesses.
Jouke Hofman, CEO of Dutch bitcoin brokerage Bitonic, was present at the Amsterdam debate. He indicated that he was pleasantly surprised by Kamminga's remarks, adding that the direction the tax authority seems to be heading in is great news for the Netherlands:
Benefits for the Netherlands
If Kamminga's remarks will indeed translate into actual policy, it would give bitcoin a VAT status in the Netherlands similar to the UK and Finland, and would certainly present a boon for the Dutch bitcoin community.
The Netherlands is also shaping up to become a hotbed for bitcoin innovation due to the establishment of BitPay's European headquarters in Amsterdam, as well as the presence in the country of analytics platform BlockTrail, the aforementioned brokerage Bitonic, and the recently-opened exchange CleverCoin, among others.
Purchase receipts image via Shutterstock
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