Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest.
International Developments
Swiss. Swiss Federal Tax Administration clarified that bitcoin is exempt from value added tax (VAT) in the country, reassuring bitcoin companies with Swiss customers that they do not need to charge VAT. However, this does not affect transactions of Swiss companies with foreign customers. In that case, VAT might still apply as the service is exported. An oral hearing to discuss bitcoin’s VAT exemption and whether bitcoin exchanges would have to pay taxes on the fees that they charge to their users took place at the European Courts of Justice in Luxembourg on June 17. The Swedish case is known as C-264/14 Skatteverket v David Hedqvist.
Canada. A long-anticipated report published by the Canadian Standing Senate Committee on Banking, Trade and Commerce called for a regulatory “light touch” on bitcoin and digital currencies. The report comes after 14 months of investigation and a number of hearings before the Senate Committee. It is anticipated to impact how the Canadian government shapes bitcoin regulation. Notably, the Committee recommended that Canadian digital currency exchanges be subject to money transmission regulations, but that companies that solely offer wallet services should not fall under the classification.