• Service: Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 4/23/2014

Estonia - Services from bitcoin trades subject to VAT 

April 23: A supply arising from bitcoin trading is subject to value added tax (VAT) at the rate of 20% because the provision of services related to alternative payment instruments is not an exempt financial service under Estonian VAT law.

In terms of income tax, bitcoin is treated as property, and as such, gains from transfers of bitcoins are subject to income tax.

VAT ruling request in cross-border situations

Estonia has joined a test group of EU Member States organized under an EU VAT Forum proposed initiative that would―in situations when a requested preliminary decision concerns VAT issues arising from cross-border transactions―allow taxable persons tor request a ruling from other EU Member States with regard to the taxation of the transaction.

The test group has been formed in order to assess whether and how this would be regulated and what problems could be encountered.

Estonian tax authorities will provide their preliminary decision in line with the provisions of the Estonian tax law. Rulings by other EU Member States will be delivered to the taxpayer together with the Estonian tax authority's decision or when the response is received.

Read an April 2014 report prepared by the KPMG member firm in Estonia: Courier - April 2014

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