As with the United States, Bitcoin regulations in Europe — particularly in the European Union and EFTA — are murky because they can exist at the union level and at the level of the member state. 

The good news is that no European country or regulating body has been outright hostile toward cryptocurrencies except Iceland, which has strict capital controls in place and forbids any movement of money out of the country. 
The European Banking Authority in London issued a warning to consumers about so-called “virtual currencies” in December 2013: 
The European Banking Authority (EBA) issued today a warning on a series of risks deriving from buying, holding or trading virtual currencies such as Bitcoins. The EBA said that consumers are not protected through regulation when using virtual currencies as a means of payment and may be at risk of losing their money. It also added that there is no guarantee that currency values remain stable The warning was issued while the Authority assesses further all relevant aspects associated with virtual currencies, in order to identify whether virtual currencies can and should be regulated and supervised. 
Besides that warning, there have been no Europe-wide regulations or laws enacted regarding cryptocurrencies. That leaves the question of regulation to be addressed at the national level (for member states; this is a moot point for non-EU countries). 
We’ll go country by country where meaningful statements have been put forth regarding cryptocurrencies: 


So far, only warnings to consumers coming out of Brussels. “The National Bank of Belgium (NBB) and the Belgian Financial Services and Markets Authority (FSMA) have issued a joint statement warning investors about the dangers of investing in digital currencies such as bitcoin, writes
“The finance minister of Belgium, Koen Geens, agreed that there was little evidence Bitcoin is used for money laundering and that consequently the Belgian National Bank has little reason to object to the use of Bitcoin.” 


The tax agency in Sofia in April said, “income from the sale or exchange of bitcoins is treated the same as income from the sale of financial assets in a personal income tax context, and the standard 10% personal income tax applied.” 


This is where the party really got started in the spring of 2013. The central bank in Nicosia has warned consumers to be wary of Bitcoin and that cryptocurrencies don’t constitute legal tender, but the government will not regulate such currencies. 


Here’s an opportunity for Europeans. In March, Copenhagen said that, as the government does not consider cryptocurrencies to be real money, neither gains nor income from them will be taxed in Denmark. 


Helsinki has said Bitcoin is “more comparable to a commodity.” Capital gains taxes apply to money made on investments, and income taxes apply to money made on mining. 


“An official from the French Ministry of Economy and Finance told reporters at Le Monde that although the country does not recognize Bitcoin as true currency, French taxpayers are obliged to declare their and pay tax on gains generated from any virtual currency transactions,” writes
“The official acknowledged French tax rules would make this position difficult to enforce, because capital gains under €5,000 that are from not regular business activities are generally exempt from taxation. Theoretically, an individual who converts bitcoins into euros would have decent legal footing to escape any tax, particularly if the transaction amounts are small and irregular.” 


“[B]itcoins are units that are not expressed in the form of legal tender,” writes the US Library of Congress. “Instead, they are units of value that have the function of private means of payment within private trading exchanges, or they are substitute currencies that are used as a means of payment in multilateral trading transactions on the basis of legal agreements of private law. 
The manner in which Bitcoins are currently given as payment, accepted as payment, or ‘mined’ does not require bank supervisory licensing. However, licensing could become necessary under various circumstances, such as the creation or maintenance of a market in Bitcoins. 
“The tax treatment of Bitcoins has been discussed in some statements by the Federal Ministry of Finance. Among the opinions voiced by the Ministry is a statement on the possibility of value-added tax liability for Bitcoin transfers, the lack of income tax effects for the underlying transaction when Bitcoins are used as a means of payment, and the lack of long-term capital gains liability for Bitcoins that are held for longer than one year.” 


Reykjavik is hostile toward Bitcoin and the outflow of capital in general. Here is what writes about Iceland: 
According to the Central Bank of Iceland, domestic entities are not allowed to buy Bitcoins from foreign entities, as such transactions are considered a capital movement out of the country. Such transactions are illegal due to the capital controls imposed in the country after the collapse of the banking system in 2008. 

“Furthermore, the Central Bank considers exports of goods and services in exchange for Bitcoin in breach of these capital controls. Icelandic merchants and service providers are thus not able to legally accept Bitcoin as payment. The Central Bank has yet to take a position on whether Bitcoin is considered a currency according Icelandic law. It does not consider Bitcoin to be e-money. It is unclear if domestic parties are allowed to transact in bitcoin among themselves. Bitcoin mining appears to be tolerated.”


Rome has made no explicit regulations regarding Bitcoin other than issuing a decree in April 2014 that defines electronic currencies and allows for their use within the framework of the 2012 EU directive.

"However, the use of electronic currency is restricted to banks and electronic money institutions — that is, private legal entities duly authorized and registered by the Central Bank of Italy," writes: "Aside from these developments, Italy does not regulate bitcoin use by private individuals, and currently the implementation of initiatives concerning the use of electronic currencies lies with the EU."


The Dutch government simply taxes Bitcoin income as it would any foreign currency. 


Oslo does not regard Bitcoin as legal money. Here is what writes about Norway: 
“Norway labels Bitcoin as a ‘virtual currency,’ which is treated as an asset. Realized gains on Bitcoins are treated as capital gains and correspondent losses are deductible as capital losses. Businesses that sell Bitcoin are considered to provide an electronic service and are subject to a 25% VAT on sales.” 


Warsaw views Bitcoins as a commodity and charges 23% VAT on any mined Bitcoins sold. 


Guidance that Ljubljana released in January 2014 requires Bitcoin payment services in the country to adhere to Anti-Money Laundering Laws and Know-Your-Customer Laws. How Bitcoin income is taxed is something of an “it depends” issue right now, as the government expects citizens to pay taxes on income from mining and doesn't if it's income from commerce and exchanging. 


In January, Stockholm classified Bitcoins as assets, and Bitcoin money-transfer services must register with the Finansinspektionen, the country’s financial regulatory agency. 


Swiss citizens have to pay taxes on Bitcoin earnings, and the government is weighing whether to treat the currency as a foreign currency. 
As writes: “Switzerland's current law does not include a capital gains tax for private citizens. … Bitcoin holdings must be declared as wealth in a yearly tax declaration with the value they had at the end of the year; a modest wealth tax (e.g. 0.2%) is applied to this sum. Businesses accepting Bitcoins as payments must charge VAT as usual (but in the equivalent CHF value).” 

The UK.

At the moment, neither VAT nor a tax on trading margins applies to Bitcoin income, but that could change, perhaps soon. The Isle of Man, it should be noted, is very welcoming of cryptocurrencies, especially exchanges. 
According to, “The Isle of Man, a self-governing British Crown Dependency, does not require digital currency exchanges that hold clients’ funds with a licensed overseas payment to acquire a license in the country.”

Update: By popular request, we have added an entry for Italy.