Finland classifies Bitcoin as VAT-exempt financial service

The classification is contained in ruling 034/2014, which states that Bitcoin purchases qualify as “banking services” under the EU Value Added Tax (VAT). The ruling was issued after a court classified Bitcoin as a payment instrument and sets Finland’s approach to the cryptocurrency apart from most European jurisdictions, which generally treat Bitcoin as a commodity.

Different European countries have taken a variety of approaches to Bitcoin taxation and the application of VAT rules. While some seek to apply VAT to all digital currency sales, others simply ignore them, leaving them unregulated in terms of taxation, or apply capital gains or corporate tax on trading or mining profits.

In 2014, the European Banking Authority (EBA) warned financial institutions against getting involved in the digital currency space until the industry is regulated.