• Bitcoin
• Cryptocurrency taxation
• decentralized virtual currencies
• digital assets
• European Union
• legal framework
• tax evasion
• tax regulation
• VAT
• virtual currencies

The study investigates the regulatory strategies in the European Union on taxing cryptocurrency, more specifically, Bitcoin. Considering the fast pace of change in the world, legal frameworks must adapt to set up limits to the new challenges brought about by the decentralized virtual currencies. The research, therefore, investigates the tax consequences of conducting a transaction using Bitcoin, especially with regard to VAT and considerations of how Bitcoin transactions ought to be regulated against tax avoidance. The dissertation elaborates on the challenges of defining and taxing activities associated with the use of Bitcoin, including operations related to exchanges and provisions of connected services, and it examines difficulties in determining the place of transactions for taxation.
The thesis will analyse the first effects of virtual currencies on already existing EU legislation concerning the legal status of these kinds of currencies, the lack of their legal tender, and digital store of value. This would include, inter alia: how the taxable person will be identified, the determination of the state that holds the jurisdiction to tax, conditions under which one will be liable, possible exemptions, and how the base shall be calculated. Solutions to the identified problems are proposed in the research to give a comprehensive framework within which Bitcoin transactions shall be effectively taxed in the EU.