After a setback in China that Bitcoin cannot be used for financial transactions, now the virtual currency is facing a challenge in Norway, as the government is saying that the currency “doesn’t fall under the usual definition of money.” Norway’s director general of taxation, Hans Christian Holte admitted that Bitcoin is in no way real money.
The new policy change towards Bitcoin says that though the Norwegian government does not accept Bitcoin as real money, it admits that Bitcoin is an asset upon which capital gains tax can be charged. Now, speculations are ripe that profit from Bitcoin will fall under the wealth tax, and that losses can be deducted.
Bitcoin Will Be Taxed
Norway’s director general of taxation, Hans Christian Holte admits that there will be a 25 percent sales tax for businesses. One interesting fact will be how to tax Norwegian Kristoffer Koch, a Norwegian investor who invested $27; however, as the prices of Bitcoin have gone up has become the owner of $886,000+. Will he be taxed at 25 percent flat rate?
On the other hand, Norway is not just interested to tax profits on Bitcoin earnings but also mulling a plan to talk with other countries to work out on the legalities of the new currency.
Bitcoin which got positive and negative both coverage the whole year e.g. Thailand declared Bitcoin illegal, China banned it from financial transactions, is gaining traction in global economy.
“Bitcoin Does Not Fall Under the Usual Definition of Money,” Hans Christian Holte
The statement coming from the Norway’s director general of taxation does not pose danger to Bitcoin; in fact, similar warnings have been issued by several governments and even the European Banking Authority last week admitted that consumers are at their own if they lose their money Bitcoin as it does not fall in the category of ‘real money.’
In its statement the EBA had said that it fully understands the specific characteristics and not use ‘real’ money that consumers cannot afford to lose. The banking body also cleared it for Bitcoiners that they cannot expect for interference from it if they lose their Bitcoin.
Bitcoiners however, object to such a narrow definition for money and rue that such an approach is shortsighted. Bitcoin is gaining traction in economies and a large number of people using them for transaction which are key features of any currency.
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