Bitcoin has never fallen under value-added tax rule in Spain, nevertheless, the recent confirmation from the Ministerio de Hacienda (Spain’s tax office) has Spanish bitcoiners tossing confetti on las callas.
Virtual currencies, namely Bitcoin, are to be treated as ‘financial services’ exempt from VAT according to Spain’s General Directorate of Taxes (DGT).
Pablo Fernández Burgueño an expert in e-commerce law saw this clarification as “logical” and told Coindesk:
“Bitcoin is mostly being used as a speculative tool, only a minority are using it as a payment form, because of this the tax office would find it impossible to levy VAT for every bitcoin transaction.”
Although a boon for BTC’s adoption in Spain, the policy is not revolutionary in the region. The UK and other European states have already defined Bitcoin in a similar fashion for tax purposes.
Ultimately, Spain has decided virtual currencies are to be defined as “other negotiable instruments”. Put simply, the announcement confirms what was already policy, that virtual currencies do not have the same status as fiat.