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 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.
“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 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.”
“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.”
“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," BitLegal.io 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."
“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.”
Update: By popular request, we have added an entry for Italy.
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