The German Finance Minister has ruled that Bitcoin is a “currency unit” and a form of “private money," and that the digital currency's users should pay sales tax as well as capital gains tax, Ars Technica reported on Aug. 18.

The declaration followed a query from a member of Parliament.

German taxpayers holding bitcoins must pay capital gains tax on any profits made from Bitcoin transactions for a year, the article says. After a year taxpayers are exempt from paying the 25% capital gains tax, which is usually paid on stocks, bonds and other securities, it says. The Finance Minister expects consumers to declare bitcoins as assets and income on annual tax returns.

Slowly, governments are articulating their stances on the decentralized virtual currency.

A U.S. federal judge recently ruled that bitcoins are subject to relevant U.S. laws as “a currency or form of money.” The ruling came during a case against a Texas man accused of constructing a fraudulent Bitcoin hedge fund.

This month, The New York Department of Financial Services issued subpoenas to 22 emerging payments players, including many Bitcoin businesses, for information on their workings. Many of these businesses said they believed the subpoena was a heavy-handed way to communicate the state's concerns.

Plus the Bitcoin community is currently adapting to Fincen’s clarification on the March guidance that Bitcoin miners, or users who maintain the digital record of transactions, are to be regulated as money services businesses.

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