Spain’s DGT: bitcoin transactions are exempt from VAT

Spain's General Directorate of Taxes (DGT), has announced that bitcoin and other cryptocurrencies will be classified as financial services. This implies that transactions with the digital currencies will be exempt from VAT under the Council Directive 2006/112/EC of 28 November 2006 on the common system of Value added Tax approved by the Spanish government.

The organization added that bitcoin is related closely to other traditional payment instruments, enabling the transfer of money and, therefore, these kinds of transactions will be exempt from VAT exempt. 

The consultation concluded saying that as cryptocurrencies, like bitcoin, functions as means of payment, they shall be regarded as negotiable instruments and, as a result, the VAT exemption 135.1 of the Directive shall apply.

The DGT states that "Supplies of goods and services are not subject to transfer tax if these services are subject to VAT".