Members of the government in Austria offered guidance on the status of bitcoin. Two cabinet ministers, while answering parliamentary questions provided by legislature member, classed the digital currency as a financial tool and tax treatment.
Michael Spindelegger, vice chancellor and the federal finance minister, noted that bitcoin is not a financial tool, but a tradable asset. The statement is similar to the position of the Financial Market Authority.
Spindelegger gave guidance on how taxes on capital revenues from bitcoin investments would be used. Those who sell bitcoin during a year after their purchase, would have to pay capital gains tax, while individuals keeping their assets for more than a year, are not subject to capital gains tax.
The minister also covered accounting rules for bitcoin companies. Assets in digital currency have to be determined as working capital or fixed assets. The cryptocurrency held for a long period of time can be depreciated.
In a translation by Coinfinity, an Austrian bitcoin consulting company, bitcoin mining is defined by Spindelegger as an ‘industrial’ activity. Mining revenues are subject to value-added tax (VAT).
Parliamentary questions were also responded by the federal science, research and economy minister Reinhold Mitterlehner. He expressed an opposite point of view and does not consider bitcoin should not be used a financial tool. Mitterlehner referred to policy in Germany, which defines bitcoin as a ‘unit of account’ and requires the German financial markets regulator to permit commercial bitcoin transactions.
Peter Šurda, an Austrian economist studying bitcoin, said: “The two ministries contradict each other, so there is no [clear] way to interpret [the guidance].” He laso noted that the ministers’ statements are unclear about how firms must deal with 20% VAT on transactions in Austria. Šurda said the ambiguity is likely to increase risk for bitcoin ATMs operators.
Coinfinity now operates Lamassu ATM in Graz. The firm’s founders are unconcerned about the guidance on VAT, saying EU standardized treatment of VAT for the digital currency is expected in the next months.
“Operationally, it doesn’t change much. We’re currently charging commission for the ATM, and treating that as subject to VAT,” said Stefan Kliment, Coinfinity co-founder.
The bitcoin questions were submitted by Niko Alm, who is the member of INEOS party and parliament. They have to be answered in two months. Alm is also an editor of Austrian Vice magazine.
In 2011, he brought a lot of attention as he was allowed to be shown on his driver’s licence photo wearing a pasta-strainer as headgear. He called it a ‘religious headgear’ as he is a committed ‘pastafarian’.