Belgium’s Federal Public Service Finance (FPS) has clarified in their statement that certain domestic digital currency transactions will be VAT exempt.

However officers of the agency say that there is a chance that this tax relief may be only temporary. The Belgian position may change depending on the stance of the European Commission. The latter are trying to work on the issues of tax harmonisation across all European Union.

The decision was revealed in the exchange of correspondence between the FPS and the local Bitcoin exchange. This decision brings Belgium in line with UK, which also made digital currency VAT exempt.

It is also important to clarify that that Belgium’s Federal Public Service Finance guidance only applies to digital currency trading and not merchant-consumer transactions.  Should this decision be reversed, retroactive tax will be highly unlikely, according to FPS.