BERLIN, Germany — Germany won’t tax bitcoin users for using the cryptocurrency as a means of payment, the Ministry of Finance has said. The guidance, published Tuesday, sets Germany apart from the U.S., where the Internal Revenue Service treats bitcoin as property for tax purposes – which means that if an American buys a cup of coffee with bitcoin, it’s technically considered a sale of property and potentially subject to capital gains tax.
Instead, Germany will regard bitcoin as the equivalent to legal tender for tax purposes when used as a means of payment, according to a new document.
The Bundesministerium der Finanzen based its guidance on a 2015 European Union Court of Justice ruling on value added taxes (VAT).
The court ruling creates a precedent for European Union nations to tax bitcoin while providing exemptions for certain types of transactions.
