Germany’s Federal Ministry of Finance or what they call the Bundesministerium der Finanzen (BMF) is planning to tax the commercial sale of Bitcoin. In one of their published reports they say that the commercial sale of Bitcoins should be taxed. This opinion, however, is not going well with the people who are themselves commercially selling the digital currency.
Many people feel that the measure has potential to greatly impact the use of the digital currency as a payment method. It is not a suo motu action but a response to a parliamentary question submitted by Christian Democratic Union (CDU) party member Dr Tim Ostermann. The government body thinks that it may be counter-productive.
The local observers believe that the commercial sale of Bitcoin is a “miscellaneous service”, and thus, needs to be taxed under German law. This opinion has though not gone well with the retailers who accept the digital currency as they would be taxed twice during transactions i.e. firstly, on the sale of goods and, secondly, when they seek to sell Bitcoins they accept.
Double taxation is often a major problem that discourages businesses and retailers and the governments try to reduce it by developing a broad understanding. It does not take much to sort out the problem but a will that understands that double taxation may help the government in the short term, but in the long term it hurts the business and economy.
Protest is Being Launched against the Dubious Law
It looks; the German authorities have been influenced by the decision taken by the UK wherein the government has imposed a value-added tax (VAT) on Bitcoin transactions. The measure from Germany’s Federal Ministry of Finance is being opposed by local trade group Bundesverband Bitcoin.
Bundesverband Bitcoin is one of the newest additions to the Bitcoin Foundation’s international affiliate program which help the digital currency reach new markets. The group realizes that the idea given by the member of the party would discourage the use of the digital currency by traders and online merchants and that is not what will be good for it.
Bundesverband Bitcoin believes that if this kind of taxation stands, it will hinder decentralized payment systems in the country. The organization is trying to get support of German retailers to lobby against the proposal by the BMF. The organization is also looking for intervention from the European Court of Justice.
To contact the reporter of this story: Deepak Tiwari at email@example.com