After an official answer by the Minister of Economic Affairs, there’s now also a statement from the Finance Minister. His answer is a bit more detailed, yet it leaves a lot of questions unanswered. In the introduction of the statement it becomes clear that differing findings are possible:
[…] value added taxation of Bitcoin is still a pending issue with the VAT-commission of the European Union.
Not a financial instrument, possibly licenses required
The Finance Minister doesn’t view Bitcoin as a financial instrument and therefore shares the position of the Austrian Financial Market Authority. He therefore differs in opinion from the Minister of Economic Affairs, who is in line with the German BaFin and would rather see Bitcoin as a financial instrument.
Even though he doesn’t view Bitcoin as a financial instrument, the Finance Minister doesn’t want to exclude the need for a license for certain business models:
[…] the Ministry of Finance doesn’t want to rule out that business models exist, which trigger the need for a concession.
VAT and Bitcoin trade
If the sale of Bitcoins entails taxation via VAT is answered partially:
Since Bitcoins are not legal tender, trading against payment can be taxable.
An exemption from VAT can currently not be applied according to the Finance Minister, since Bitcoin does not constitute a claim on legal tender money.
Private selling of Bitcoin exempt from taxes after one year
Any individual who holds Bitcoin as a financial asset in his private property for more than a year and then decides to sell in private, is exempt from paying a tax on speculative gains upon realizing a profit:
[…] the sale of Bitcoin constitutes speculative trading according to § 31 EStG 1988, if the time period between buying and selling is less than a year.
“Interest-bearing investments” in Bitcoin will be taxed as usual as capital income.
Bitcoin-mining is an industrial activity and subject to VAT
In contrast to the Minister of Economic Affairs, the Finance Minister views Bitcoin-Mining as an industrial activity (“gewerbliche Tätigkeit”):
If Bitcoins are created (Mining), this would basically imply an industrial activity (“gewerbliche Tätigkeit”), leading to the applicable fiscal consequences. Creation of Bitcoins will not be treated differently from the creation of any other commodity.
Whether the Industrial Code will be applicable when running a mining pool, trading Bicoin or operating an exchange, is not answered by the Finance Minister:
This question does not fall in the area of enforcement of the Ministry of Finance.
According to the Finance Minister, Bitcoin-mining can be an activity subject to tax:
Since the Bitcoin-miner offers a service within the frame of mining (verification of open transactions), in order to receive a service in return (Bitcoins or a fractional amount), taxable activities may exist, if the recipient of benefits is definable. In the absence of an applicable exemption rule, these activities are subject to VAT. If more miners decide to form a mining-pool, this does not affect the fundamental taxable event – if the service recipient is definable – and tax liability. The pooling can be qualified as a non-commercial partnership (“Gesellschaft bürgerlichen Rechts”).
VAT when operating a Bitcoin machine
The individual or company running a Bitcoin ATM as a business, has to levy taxes on this activity, the same applies to the operation of an exchange:
The services offered when running an automated machine that converts legal tender to virtual currencies that are not legal tender, are taxable and liable to tax. […] if the exchanging party is an entrepreneur, who realizes this turnover within the framework of his enterprise. If the services at issue are offered through an exchange, the execution mentioned above applies correspondingly.
Bitcoins as part of business assets
Bitcoins that are kept as part of business assets, have to be declared as either fixed assets or working assets and can trigger depreciation or appreciation:
If Bitcoins form part of the business assets [… ] an assignment to fixed or working assets is necessary. The documented intention to keep the assets long-term will be decisive for the classification as fixed assets. Therefore it is possible that during the yearly conducted evaluation, degradation but also appreciation with taxable effect occur. For an entrepreneur who buys Bitcoins on and exchange and then sells them there for Euro, gains from exchange rate fluctuation as well as loss by exchange can accrue that have to be considered when determining the taxable income.
More questions than answers?
All in all, the answers collected here by both ministers raise many new questions, the more so as in a few points they are simply contradictory.