Here in the UK Bitcoins are treated as an electronic service. This means once you're registered for VAT (and you must past ~£70k revenue) you have to charge VAT on sales to:
- Anyone in the UK
- Individuals in the EU
And:
- Reverse charge VAT to business in the EU
Having to charge VAT on Bitcoins is a show stopper if you're intending to sell them unless you close your doors to EU customers.
Bitcoins need to be classed as VAT exempt, or small business in the UK trying to get into Bitcoin will always struggle to grow.
There is no official stance on bitcoin by the UK government, or tax authorities. VAT is not chargeable on bitcoin transactions. There was one gy who was advised by his accontants that he should be charging VAT but that was not a legal requirement, more his accoutnants taking a very risk averse position, that way if VAT was ever brought in on bitcoin he would not get an unexpected VAT bill.
There are There are also some goods and services that are 2 types of 'exemption' to VAT:
* exempt - so no VAT is charged on them
* outside the scope of the UK VAT system altogether
Bitcoin is outside the scope of VAT entirely and it would require the tax man/govt making a declaration on bitcoin as to how it is treated under VAT rules. This has not happened, therefore VAT is not applicable to bitcoin.
That's not really true. VAT is no longer charged on gold coins for investment purposes since the EU made the UK change the law but it is not that clearcut.
- Anyone in the UK
- Individuals in the EU
And:
- Reverse charge VAT to business in the EU
Having to charge VAT on Bitcoins is a show stopper if you're intending to sell them unless you close your doors to EU customers.
Bitcoins need to be classed as VAT exempt, or small business in the UK trying to get into Bitcoin will always struggle to grow.