Is Cryptocurrency Legal in Europe?

Is Cryptocurrency Legal in Europe?

According to coin.dance there are currently no restrictions on bitcoin or other cryptocurrencies in 105 countries around the world. European regions have been some of the most progressive in the world, with cryptocurrencies not outlawed in many countries. Here is a quick look at the status of digital currencies in key European markets.

European Union (EU)

As of now, bitcoin is legal in the EU but there has been no legislation drafted or passed with regards to its status as a currency. However, VAT/GST is not applicable to conversions between fiat currency and cryptocurrencies.

Belgium

Currently, there is no indication that the government will take steps to regulate digital assets but the Special Tax Inspectorate has said that traders speculating on cryptocurrencies are expected to pay a 33% tax on any gains. However, these regulations have proven hard to implement as most trading takes place on foreign exchanges, on which Belgian authorities have no jurisdiction. As of now, Brussels has no comprehensive policy on cryptocurrencies.

France

Finance Minister Bruno Le Maire has indicated an interest to formulate and implement a legislative framework to allow ICOs to be conducted in France. However, no draft has been completed yet, but the government has since declared that the previous top tax rate of 60% on cryptocurrency trading profits would be reduced to a flat 19%.

Germany

Bitcoin is recognized as legal tender in the country, and is also exempted from taxes so long as it is used as a form of payment. In addition, there are no taxes levied on sales of cryptocurrencies if it was held for more than a year, making Germany the most unlikely of crypto tax havens!

Italy

Currently, the Italian Ministry of Economics is working on regulations that will attempt to classify usage of cryptocurrencies in the country. It also plans to compile a list of all service providers linked to cryptocurrencies. This is to ensure the country falls in line with anti-money laundering regulations established by the EU – an organization that Italy is a founding member of.

Netherlands

A recently concluded government study indicated that cryptocurrencies pose a low economic risk to the country’s financial status. Prepared by the Netherlands’ Bureau for Economic Policy Analysis, the report also warned against harsh regulations that will stunt the growth of cryptocurrencies, arguing that it could see the rise of shadow banks.

Portugal

Tax authorities in Portugal have published a framework that outlines taxes on cryptocurrencies; profits gained from trading are not subject to taxation, but transfers of tokens and coins as an alternative form of payment may be subject to VAT, depending on the particular case.

Russia

The Ministry of Justice has declared that cryptocurrencies fall under the legal category of “other property” in Russia, while two related legislations have been filed in the State Duma, which is part of the Russian parliament. One bill will define cryptocurrency activities such as mining and ICOs, while another draft will amend Russian civil law to regulate transactions surrounding cryptocurrencies. In addition, Prime Minister Dmitry Medvedev has said that new Russian laws will not use the terms cryptocurrency and other colloquial terms; lawmakers will instead work to develop and define the legal concepts of digital money and digital rights.

Spain

Like many other European countries, Spain does not recognize cryptocurrencies as legal tender, but they remain legal to own and trade. As a digital asset, transactions potentially fall under the jurisdiction of barter rules in Spanish civil law. The Spanish Congress has also pushed for a draft legislation that will allow for positive regulation of blockchain and cryptocurrencies in the country.

Switzerland

There is no need for a license needed to pay or accept payment in cryptocurrencies in Switzerland, but some related activities are subject to anti-money laundering laws. In fact, the country is something of a crypto haven, with many companies setting up shop and thriving in the unregulated environment. Recently, the Swiss Financial Market Supervisory Authority published regulations for ICOs, which outlined clearly the laws by which crypto startups in Switzerland must operate within.

United Kingdom

Tax is imposed on profits gained from trading cryptocurrencies in certain cases, and payments for goods and services with such currencies are also subject to VAT. The Financial Conduct Authority is currently working in tandem with the Bank of England and the UK Treasury on a cryptocurrency discussion paper. The aim is to identify potential risks and issues that surround the burgeoning industry, with the aim of moving towards regulation.

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