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The General Directorate of Taxes (DGT), has considered that Bitcoin and other digital currencies will be classified as financial services. Consequently, transactions with Bitcoin are considered 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 Spanish DGT concludes that Bitcoin is closely linked to payment instruments, which allows the transfer of money and, as such, this kind of transactions will be VAT exempt. The consultation ends stating that virtual currencies, such as Bitcoin, works as mean of payment and, therefore, it shall be considered as negotiable instruments and, consequently, 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”.
The exempt transactions’ regarding other means of payments falls into the range of financial transactions and, in particular, it refers to means of payment. In this context, Germany, France, Finland, United Kingdom and Belgium have taken the step of stating the VAT exemption for Bitcoin transactions and approaching the legal status of the Bitcoin transactions to the means of payment, instead of considering Bitcoin as simple goods or commodities.
This consultation turns out to be of great importance, given that, in addition to confirm the VAT exemption of Bitcoin transactions adopted by Spain, but it also gives a legal alignment much less ambiguous other than what has been presented up until now by any other European country besides presenting a much more healthy view than the BitLicence proposal.
The argument presented by the General Directorate of Taxes heads up to meet the current regulations rather than present new ones. Considering that Bitcoin can be treated has a payment instrument, the appropriate regulation seems to be already in place in most of the European Union countries.
Alejandro Gómez de la Cruz 
Guest 
Hi Nuno. First of all, thank you for the link to our platform (Law & Bitcoin). If you are interested in the impact of the other taxes applicable in Europe by using cryptocurrencies and their underlying technology, we are going to talk about that in the following articles.
Thanks again!
Hi Alejandro! I’m keenly interested in the ongoing discussion about taxation and regulation of cryptocurrencies in Europe. If you have any written articles on the subject or suggestions on books or published papers, that would be much appreciated. Thank you!
Dear Patrick! Thanks for the comment. If you are interested in that matter feel free to follow us on Twitter and Facebook. We will deal with those matter in the following articles and we are going to launch handbooks of legal issues regarding Bitcoin. If you are an specialist in legal matters or accounting, you are invited to collaborate with us.
Kind regards.
Hi Alejandro! I’m keenly interested in the ongoing discussion about taxation and regulation of cryptocurrencies in Europe. If you have any written articles on the subject or suggestions on books or published papers, that would be much appreciated. Thanks!