Clarification of the company Moro with regard to crypto currencies and investment gold and the payment of tax duties for natural persons and companies
Moro is the leading specialised company for investment gold trading in Slovenia.
In 2014, through the web shop www.morobtc.com, we have enabled investors to buy gold for bitcoin. The second turning point in business was in 2016, when we signed an exclusive contract on the delivery of investment gold in the form of Argor Heraeus Switzerland gold bars and Vienna Philharmonic Orchestra gold coins – the recognized mint The Austrian Mint, with one of the world’s leading currency exchange buyers – Bitstamp. This allows investors to secure the liquidity of their profits by means of investment gold. At Moro, it is always possible to sell crypto currency for trading purposes.
With regard to crypto currency and investment gold trading, the issue of taxation is increasingly being raised. In accordance with the applicable laws and the European Court judgment, we have prepared some clarifications, namely:
- Investment gold:
Article 118 of the Value Added Tax Act defines the term investment gold, while Article 119 of the VAT Act-1 defines the exemption from paying VAT.
According to this regulation, the term »investment gold« means:
- a)gold in the form of bars or plates with the mass accepted by the precious metals market and a purity equal or larger than 995 per thousand (https://www.moro.si/si-cenik/;
- b)gold coins of purity equal or larger than 900 per thousand, minted after 1800, which are or have been a legal means of payment in the country of origin and are usually sold at a price not exceeding 80% of the value of gold on the free market, contained in coins, (https://www.moro.si/si-cenik/).
The purchase and sale of investment gold is therefore completely non-taxable for legal and natural persons.
- Purchase and sale of crypto currencies for natural persons – VAT
Pursuant to the judgment of the European Court (fifth council) of 22 October 2015, the purchase and sale of crypto currencies by natural persons is not subject to VAT.
The virtual currency “bitcoin” is a contractual payment instrument and, firstly, cannot be considered a current account, deposit, payment or transfer. Secondly, as opposed to debts, checks or other payment instruments referred in Article 135(1)(d) of the VAT Directive, this currency is a direct means of payment between entities which have accepted it.
- Gain from purchase and sale of crypto currencies for natural persons – payment of income tax
A natural person is exempt from paying income tax on achieved profit due to changes in the crypto currency value. The Income Tax Act (Articles 64 and 67) stipulates that the income tax is not paid on achieved profits from capital in case of sale of movable property, with exceptions. Since crypto currency is not a financial instrument or stock, the profit achieved by a natural person through trading, is not taxed.
The Tax Administration shall charge income tax to a natural person if they receive crypto currency as compensation for work, consulting, etc. All earnings and profit are considered income, regardless of their type. Although payment is not done in EUR but bitcoin, a natural person shall be obliged to pay income tax on such income. The income amount in EUR is determined by taking into consideration the bitcoin value in EUR for the period when the income had been received. The same applies when a natural person achieves profit by creating or mining.
- Crypto currency owned by a company
It is not the same when crypto currency is owned by a company or a natural person engaged in business activity – with an independent entrepreneur status. If an independent entrepreneur within their business activity, trades in crypto currency or acquires bitcoin by mining, such income shall be taxed in accordance with the provisions on taxation of business income.
If bitcoin is owned by a company who uses them for trading, taxation of profit depends on the company’s business results. Or as they say in Furs: »The accounting procedure in the case of the described trading/business or in such form, depends on the circumstances of each particular case.” More specifically – for determining the tax base, income and expenses from the Profit and loss account and accounting rules are recognized.