Exchange of money into Bitcoins is VAT free
The fact that the VAT exemption for the exchange of legal tender also applies to bitcoins has now been confirmed by the European Court of Justice.
According to the EU VAT Directive, a transaction is tax-exempt if it relates to foreign currency, banknotes and coins that are legal tender. The electronic currency Bitcoin, which is becoming increasingly widespread in e-commerce, is not legal tender. Nevertheless, the European Court of Justice considers the exchange of conventional currencies for Bitcoins to be a tax-free transaction.