Earlier this year, the Court of Justice of the EU (CJEU) found in favour of the bitcoin business by legalising digital money throughout the EU.
Still, it is worth noting that the legal evaluation of such money differs from country to country, which complicates taxation for casino owners. The supreme court of the EU has regulated the fiscal relationship between businessmen, their clients, and the state, making a bitcoin casino solution a legitimate and transparent type of business.
Features of Blockchain Platforms
The technology was invented in 2008 and became the basis of several popular crypto money, including bitcoins (BTC). This is a global digital network that can be accessed from any PC if users have a stable internet connection.
To work with such transfers, you need only peer-to-peer software, so the connection to central payment processors or systems of international financing agencies is not required.
It is a good idea to develop a bitcoin casino script for several reasons:
| Non-centralised operation | The entrepreneurship activity does not depend on regional politics, the work of local banks or government agencies. Transfers cannot be blocked or cancelled, and the digital assets of operators cannot be stolen |
| The minimum cost of the transfer | Blockchain technology relieves businessmen from currency restrictions, extra fees for the maintenance of payments, and commissions |
| High speed of money transmission | The average time for sending money to a BTC wallet is 5–7 minutes. To make a payment, operators do not need to go through the verification of a legal entity or wait for a positive decision of the bank for several days |
| Relevance among clients | Players prefer bitcoin casino software due to fast and anonymous payments and an ability to go to the gaming site from any part of the world |
Taxation of Bitcoin Platforms
Some entrepreneurs may face problems with the legalisation of BTC transactions.
The main difficulties in the taxation of blockchain projects:
- The disunity of the legislation. Some European countries with an advanced economy (Germany, Great Britain) consider this currency a legal one, while others (Italy, Spain, Greece) are sure that it is illegal.
- Double taxation. In many parts of the world, entrepreneurs are required to pay dual-rate taxes. The first tax event takes place when gamblers lose money (VAT in the amount of 15–25% depending on the tariff rate), and the second — when crypto money is exchanged for fiat currency.
- Difficulties during the report generation process. Many businessmen who already have a working traditional iGaming portal would like to start a bitcoin casino as well. But they do not understand how to combine these 2 projects within one legal entity (how to file a tax return, form financial statements to the bank, and send reports to the creditors and tax authorities).
The European Court Supports the Bitcoin Business
At the beginning of last year, David Hedqvist (the owner of the Bitcoin.se online portal for BTC exchange transactions) filed a lawsuit with the Swedish tax service. The case was referred to the Supreme Court of the EU (CJEU), and it made some important decisions for the legalisation of the bitcoin platforms.
Exchange Transactions in Digital Currency
Bitcoin casino software is most often used to accept deposits made by gamblers and pay them the won prizes. Due to the decentralised nature of bitcoins, the regulator cannot monitor and control such operations. As a consequence, the first tax event takes place when digital funds are exchanged for fiat money.
In many EU countries, for example, in Germany, the practice of double taxation of exchange transactions is applied.
VAT is charged on:
- the size of the transfer;
- the margin for exchange services.
The CJEU is changing the established practice by exempting entrepreneurs from additional taxes.
According to the decision of the CJEU, those who use the bitcoin gambling script have to pay VAT only on the amount of margin or swap (the difference between exchange rates) on exchange transactions. This approach simplifies business dealing and reduces the tax burden on casino games.
Acceptance of Winnings in BTC
The CJEU equates bitcoins with “an alternative to legal means of payment”. As a result, such transactions are exempted from a fixed VAT of 15–25% for the provision of gambling services to end consumers — gamblers.
Besides, counterparties may choose not to pay VAT on B2B transfers if they are:
- carried out in bitcoins;
- carried out between residents of the same country.
At the same time, those businessmen who choose to buy a bitcoin casino must remember about the specifics of the local fiscal policy of the EU member states.
Germany, for example, allows operators to choose the taxation method. If businessmen indicate BTC transactions as non-taxable, then they will lose the right to the value-added tax refund when purchasing the bitcoin casino for sale, software, equipment or hosting.
Moreover, non-taxable BTC transactions cannot be carried out by small companies with an annual turnover of up to 50 thousand euros. Such businesses pay taxes according to a special preferential scheme, so it is more profitable for operators to pay the VAT of 7 % instead of the usual 19%.
Cross-Border BTC Payments
When selling digital currency to brands that are registered in the EU, entrepreneurs declare such transactions tax-free. Accordingly, the tax asset on purchase is not provided.
The processing of crypto transactions between third-country (not from EU) counterparties is subject to the laws of those jurisdictions.
Before launching a crypto casino script, operators need to simulate all options for the financial interaction between legal entities and the government. In some cases, it is profitable to carry out BTC transfers without paying VAT, and sometimes, it is better to pay all taxes but at a reduced fare.
Financing Agencies Advocate for the Legalisation of Bitcoins
Fidelity Investments, a prestigious digital asset management company, calls BTC a promising payment method with excellent capitalisation opportunities.
Riya Bhutoria, the chief technical officer, devoted a large-scale press conference to digital currency. Among other positive characteristics of BTC transactions, the speaker highlighted their decentralisation, permanence, and strong security. Bhutoria calls small volatility issues of bitcoins a consequence of the increased interest in digital assets.
European financing agencies also see great potential in the new type of money. By the end of this year, the European Parliament promises to refine the MOSS declaration. This document will simplify the reporting process for those EU operators that provide digital services, including the cryptocurrency casino script.
The Main Things about the Legalisation of Crypto Projects
When you choose to start a crypto casino, first of all, you need to develop it and think about its legality.
Such solutions include a catalogue of dynamic games, a progressive platform with management settings, and secure payment gateways.
- Blockchain platforms are considered beneficial for their decentralised structure, high reliability and speed of operation, and popularity among users.
- The CJEU stands for the legalisation and simplification of such payments. They are exempt from VAT in the case when entrepreneurs receive deposits from gamblers and exchange bitcoins for fiat money.
- Prestigious financing agencies also advocate for the use of this currency in business, calling it a legal payment method.
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