[heading]Germany Recognizes Bitcoin As “Private Money”[/heading]
Is Bitcoin legitimate? Is Bitcoin illegitimate? This is something for individuals to decide, not countries. But, what does it mean that country’s are adapting to decentralized currencies, and what effectiveness will they show in the long term? Only time will tell.
Bitcoin’s legitimacy continues to be asserted as yet another government has gone so far as to give the decentralized virtual currency “private money” status.
Germany has recognized Bitcoin for legal and tax purposes, meaning it is the first country to take an official stance on the status of using the online currency as money.
This means that some commercial profits on Bitcoin related endeavors may be taxable, but personal use of the currency will remain without tax, according to the paper.
A Finance Ministry response to a query from Frank Schaeffler ( a member of parliament’s Finance Committee) made the recognition clear.
“For the first time, the federal government recognizes Bitcoins as private money,” said Schaeffler.
The first trading platform in Europe with direct cooperation with a bank regulated by the Financial Supervisory Authority was set in Germany. Bitcoin Deutschland GmbH agreed to convey Bitcoins on its platform as an intermediary through the German web 2.0 bank Fidor.
As Gold Silver Bitcoin covered heretofore:
Bitcoin increased 25% in German Euro terms over the course of the day on one simple announcement: the p2p digital currency would not be subject to a litany of taxes.
Bitcoiners have been waiting for the Bitcoin shoe to drop in Germany. On the heels of Canadian and American rulings, it has been of great interest how Europe would respond.
Germany’s financial role since the onset of the economic crisis in 2009 has at times been compared to the Nazi party’s hold over Europe, with Cyprus bank accounts being looted most recently and Greece ravaged before that.
Despite the hawkish insistence of Germany that the rest of Europe – in particular the southern countries – capitulate to the industrial center or historical core of Europe, Die Muetterland apparently has a soft spot for digital currencies…for now.
And so, Bitcoin gains (in terms of profits) will not be subject to tax in Germany after one-year. And it is likely that since Germany has taken such a laissez-faire approach to Bitcoin other European nations will as well.
Therefore, the online money will be treated differently by the Treasury than stocks, bonds or certificates, all of which are subject to a withholding tax of 25 percent plus solidarity surcharge and church tax. In the case of Bitcoin, after one year, there will be no such taxes reports Die Welt.
Such a tax exemption in terms of capital gains in Bitcoins comes as a sense of relief to German investors in the online currency.
The tax exemption of capital gains in Bitcoins findings of a parliamentary inquiry that has provided to the federal government the FDP financial expert Frank Schaeffler and the “world” exists. “It is good that investments in Bitcoins can come with more certainty now. Private profits from the sale of Bitcoins are tax-free after one year,” said FDP financial expert Frank Schaeffler.
There has been an ongoing debate in Germany regarding the tax treatment of digital currency. The Federal Government’s response has clarified this.
Frank Schaeffer, who made the request for clarification on Bitcoin, is also known as a “Euro-rebel” due to his having repeatedly voted in parliament against the bailout policies.
In August a US Federal Judge ruled that Bitcoin is a legitimate currency, with the decision coming after Trendon Shavers, a 30-year old businessman, had scammed customers out of $4.5 million worth of the crypto-currency. His argument was that Bitcoin was not real money and so is not subject to regulation. The court dismissed the claim.
Still, private banks have not been too kind to Bitcoin-related companies, having implications for the viability of the currency at its’ current stage.