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EU Tax Law Could Make Bitcoin Transactions Invalid

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EU Tax Law Could Make Bitcoin Transactions Invalid

A recent amendment to EU tax law could mean trouble for bitcoin, as many believe it will make transactions using the cryptocurrency more difficult.

In an effort to ensure that Value Added Tax (VAT) is paid on electronic transactions, the new law mandates that companies record the country of residence for each customer. 

Companies dealing in electronic transactions will be required to have two sources that confirm the country of residence of their customers, something that critics say could put another nail in bitcoin’s coffin.

Currently, EU policy outlines nine acceptable examples of said proof, most of which are unattainable through bitcoin purchases.

However, bitcoin supporters say the new EU law is simply a minor obstacle and that the cryptocurrency’s “anonymity” doesn’t make the buyer invisible.

EU commission spokesperson Vanessa Mock has said the new legislation hasn’t been put in place in order to violate customer’s privacy by seeking out their identity. Instead, she said, companies simply must prove where that person is residing.

Related Link: Bitcoin Usage To Plummet, Report Says

Many say bitcoin transactions can be made legal under the new rules by using the buyer’s IP address coupled with an invoice address.

Although IP address isn’t listed under the EU’s examples of proof of residency, member nations have the ability to determine whether or not a company’s efforts to determine residency are sufficient.

But some are wary about the use of a computer IP address as a form of proof due to the potential use of programs that hide or distort such information, and the fact that it simply supplies the current location of a computer.

Posted-In: BitcoinCryptocurrency News Forex Global Top Stories Markets Tech Best of Benzinga

 

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