On October 22, 2015, the Court of Justice of the European Union (Court) ruled that the exchange of traditional currencies for units of the “bitcoin” virtual currency is exempt from value added tax (VAT). The Court held that this type of transaction did not fall under the VAT directive, because “virtual currency has no purpose other than to be a means of payment” and thus “cannot be characterised as ‘tangible property’ within the meaning of Article 14 of the VAT Directive.” It also clarified that “the exchange of traditional currency for units of the ‘bitcoin’ virtual currency and vice versa, in return for payment of a sum equal to the difference between, on the one hand, the price paid by the operator to purchase the currency and, on the other hand, the price at which he sells that currency to his clients, constitute the supply of services for consideration” and are thus within the scope of the directive.  The Court finally concluded that the VAT exemption provision for “currency [and] bank notes and coins used as legal tender” applied to the transactions at issue. The Court noted that the aim of the exemption, which is to alleviate “the difficulties connected with determining the taxable amount and the amount of VAT deductible . . . whether it is a case of the exchange of traditional currencies . . . or the exchange of such currencies for virtual currencies,” would be undermined if it was not applied to the bitcoin transactions.