The Republic of Georgia exempted cryptocurrencies from value added tax (VAT). Recently, the Minister of Finance of Georgia Nodar Khaduri signed a bill aimed at regulating the taxation of enterprises that sell or extract cryptocurrencies .
The bill came into force at the end of June; it defines the decentralized currency:
“ Cryptocurrencies are digital assets that exchange electronic means and are based on a decentralized network. Their exchange does not require a reliable intermediary, and they are governed by distributed registry technology . ”
With the introduction of the bill, residents of the country can exchange cryptocurrencies for fiat currency without paying VAT. However, Khaduri noted that Georgian lari will remain legal tender in Georgia and that the country will not allow the use of cryptocurrency for payments.
At the same time, mining companies will have to pay VAT if they are not registered abroad. This may lead to migration of local mining enterprises.
As reported by the Cointelegraph in October 2015, the EU Court ruled that Bitcoin exchange should be exempted from VAT. On this occasion, an Italian lawyer specializing in gold and cryptocurrencies, Stefano Capaccioli noted:
“This decision is of historical significance: it clarifies the situation and eliminates confusion in the application of taxes in relation to Bitcoin, considering cryptocurrencies as a conventional payment instrument.
The decision is a practical demonstration of the fact that bitcoin does not need special regulation, but only an interpretation of the current legislation. ”
Publication date 07/14/2019
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