Swedish Tax Agency went on a heavy setback in the court on Thursday. The European Court has decided, contrary to the Swedish Tax Agency's opinion, that Bitcoin not be subject to VAT.
The decision means that the exchange and trading of Bitcoin should be handled as any other currency with regard to VAT taxation. Something that can be seen as the crypto-currency takes a small step closer to the same status as "real" currencies.
Bitcoin exchange rate this year has fluctuated between 200 and 300 dollars per bitcoin. A stabilization compared with the previous year's violent rise and fall. However cryptocurrency wide impact has not yet witnessed and many bitcoin fans now talk more about the possibilities with the technology behind bitcoin than the currency itself.
The background to the decision of the European Court of Justice is that a Swedish private individual got curious regarding the tax rules for VAT related to exchange of bitcoin. The Board considered that it would be VAT exempt but the Tax Agency was at odds with the Board's opinion and pushed the issue to the Supreme Administrative Court. They asked in turn if the European Court of Justice opinion. Now it is clear, therefore, that the European Court of Justice runs over the National Tax on the VAT issue.