The Spanish Tax Authorities have recently issued a binding ruling through which they have confirmed that the trading of virtual currency such as Bitcoin is exempt from VAT.
The Spanish Tax Authorities have recently issued a binding ruling through which they have confirmed that the trading of virtual currency such as Bitcoin is exempt from VAT.
It is the opinion of the Spanish Tax Authorities that the trading of Bitcoin is covered by article 135.1.d) of the VAT Directive which has its correspondence with article 20 One.18th h) of the Spanish VAT Law:
“Member States shall exempt the following transactions (…):
d) transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection (…)”
The concept of “other negotiable instruments” is defined neither in the VAT Directive nor in the Spanish VAT Law. However, the ECJ, on case C-461/12, Granton Advertising, have considered that other negotiable instruments shall mean only those rights conferring an entitlement to a particular sum of money. The Spanish Tax Authorities follow this same criterion and consider that virtual currencies such as Bitcoin must be included within the meaning of “other negotiable instruments” given that they act as a means of payment and confer a future entitlement to a certain amount of money, just like any other official currency. For this reason, the transfer of Bitcoin must be exempt from VAT in Spain.
Fernando Matesanz
Spanish VAT Services Asesores
