In line with a recent ‘report‘ published, Georgia has signed a new bill to exempt digital currencies from VAT [value-added tax].
According to the report, Nodar Khaduri – Finance minister of Georgia has recently signed a bill aimed at regulating the taxation of entities that trade or mine digital currencies. The bill entered into force at the end of June. The definition of decentralized currency that the bill puts forward is reportedly the following:
“Cryptocurrencies are digital assets that are exchanged electronically and supported on a decentralized network. Their exchange doesn’t need a reliable intermediary and are managed employing DLT [Distributed Ledger Technology].”
With the introduction of the new bill, residents of the country can exchange digital currencies for fiat currency without the transactions being subjected to VAT. Moreover, Khaduri outlined that the Georgian lari will remain as the medium of legal tender within Georgia and – just like foreign fiat currencies – the country won’t permit employing ‘cryptocurrencies‘ as a medium of payments.
The article goes on to specify that mining firms will have to still pay VAT unless they’re registered abroad which would indeed result in native ‘mining‘ businesses relocating.
As reported earlier in Oct. 2015, the EU Court of Justice ruled that the Bitcoin [BTC] exchange was exempt from VAT in a landmark verdict. Also, within the same month, an Italian lawyer named ‘Stefano Capaccioli’ specializing in gold and digital currencies commented on the ruling, adding:
“The call is of historic importance: it clarifies all doubts and removes the confusion on the relevancy of consumption taxes to bitcoin, considering digital currencies as a simple means of payment and, beneath a VAT perspective, similar to a foreign currency. […] The Judgment is the practical demonstration that bitcoin requires no specific regulation, but solely the interpretation of existing legislation as bitcoin doesn’t fall in any legal vacuum.”