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The Republic of Georgia exempted cryptocurrency companies from paying value added tax (VAT), according to the already signed bill.
According to the report, the Minister of Finance of Georgia, Nodar Khaduri, recently signed a bill aimed at regulating the taxation of enterprises that sell or extract cryptocurrency. The bill came into force at the end of June.
Reportedly, the definition of decentralized currency presented in the draft law is the following: “Cryptocurrencies are digital assets that exchange electronic means and are based on a decentralized network. Their exchange does not require a reliable intermediary, and they are managed using distributed registry technology (DLT). ”
With the introduction of the bill, residents of the country can exchange cryptocurrencies for the specified currency without VAT. However, Khaduri noted:
Georgian lari will remain legal tender in Georgia and that, like foreign paper currencies, the country will not allow using cryptocurrency for payments.
The article further states that mining companies will still have to pay VAT if they are not registered abroad. This may lead to the relocation of local mining enterprises.
Earlier, in October 2015, the EU Court ruled that the Bitcoin exchange was exempted from VAT as part of a historic decision.
The following month, an Italian lawyer specializing in gold and cryptocurrencies, Stefano Capaccioli commented on this decision: “The solution has historical significance – it clarifies all doubts and eliminates confusion regarding the applicability of consumption taxes to bitcoins, considering cryptocurrencies as a simple means of payment and, from the point view of VAT, similar to foreign currency. The decision is a practical demonstration of the fact that Bitcoin does not need any particular regulation, but only in the interpretation of current legislation, since Bitcoin does not fall into any legal vacuum. ”