Bitcoin Becomes Legal Payment Method in Germany

Cryptocurrencies used for purchases of goods or services are declared free of tax.

by Viko
02 March • 1.5 min
In Regulation
Germany’s finance ministry has legalized Bitcoin and other cryptocurrencies as a payment method. In a document released on 27 February, the ministry stipulates that Bitcoin will not be a subject of taxation when it is used to make purchases of goods or services.

The move follows a decision by the European Court of Justice (RCJ) from October 2015, where Bitcoin and other digital coins are regarded as a legal means of payment and currencies in terms of taxation. The ruling also released Bitcoin transactions from value-added tax (VAT).

Whether cryptocurrencies are a legal method of payment or an asset that can be taxed, remains a matter for every single EU member to decide. In Germany, cryptocurrencies will be accepted as equivalent to fiat money.

Earlier this year, Bundesbank director Joachim Wuermeling stated that digital currencies must be regulated on an international level, not depending on the policy of every single country.