Georgia has announced the exemption of cryptocurrencies from its value-added tax (VAT), setting a blue print for other nations having similar debates.
According to reports, Georgia’s Minister of Finance – Nodar Khaduri has signed the bill aimed at regulating taxation of entities that trade or mine cryptocurrencies. By this new bill, citizens and resident of Georgia can buy, sell, store and exchange cryptocurrencies for fiat currency without being charged VAT on these transactions.
The minister however reemphasized the country’s stance on foreign currencies as he says; all foreign fiat currencies and crypto won’t be used for payments at this time, as the country looks to boost its legal tender – the Georgian Lari. Also, crypto mining companies registered within the country are not exempted from VAT.
Georgia’s latest legislation seems to reflect the 2015 ruling of the EU Court of Justice in which it states that bitcoin/crypto exchange are exempt from VAT. The ruling and bill point to crypto as currency and not commodity, as commodities remain subject to consumption tax in form of VAT.
By this move, Georgia joins UK in treating crypto as foreign currency, with no imposition of value-added tax on exchange and related activities.
Crypto Fact: Georgia ranks among the top 5 crypto-friendly nations globally. The country also hosts a large number of crytpocurrency mining firms, considering its cheap hydro electricity.