Austria and Cryptocurrency
Austria Cryptocurrency Laws
Austria has not currently adopted specific legislation with respect to cryptocurrency-related business activities. Under current legislation, cryptocurrencies do not constitute legal tender for purposes of Austrian law.
Anti-Money Laundering Laws
The Financial Markets Authority (FMA) issued Anti-Money Laundering (AML) regulations in 2020, providing for fines of up to 200,000 euros against cryptocurrency-related business that fail to register with the FMA.
The FMAs regulations follow Austria’s implementation of the Fifth Money Laundering Directive (AMD 5), defining crypto-assets as “financial instruments.” The new FMA regulations provide registration requirements with respect to:
the issuance and selling of virtual currencies as well as transferring them, trading and exchange platforms for them (irrespective of where virtual currencies are to be exchanged between one another or for legal tender payment instruments or vice versa) as well as providers of custodian wallets.
Under Austrian law and guidance from the Federal Ministry of Finance, earnings from cryptocurrencies are subject to taxation. The Ministry does not recognize crypto assets such as bitcoins as an official currency. Rather, they are generally classified as other (intangible) assets not subject to depreciation.
Austrian law requires that business holding crypto assets held as business assets must comply with the assessment regulations of the Austrian Income Tax Act (Einkommensteuergesetz, EStG) must be observed by companies preparing their balance sheets, as well as the Austrian Commercial Code (Unternehmensgesetzbuch, UGB) in accordance with § 5 of the Austrian Income Tax Act.
Austrian law further classifies the mining of crypto assets to as “commercial activity” subject to taxation.
The exchange of legal tender (e.g. Euros) for bitcoins or vice versa, is exempted from VAT according to the case law of theCJEU (see CJEU 22/10/2015, Case C-264/14, Hedqvist; UStR 2000 m.no. 759).
More Background on Austria’s Development of Cryptocurrency Regulation 
The Austrian Ministry of Finance (Bundesministerium der Finanzen, BMF) does not qualify cryptocurrencies as legal tender or as financial instruments. Instead, it classifies them as other (intangible) commodities. It stated that cryptocurrencies are treated like other business assets for income tax purposes. According to the Ministry, “mining” generally is a commercial activity and is therefore treated like any other production of goods. The same applies to the operation of online trading platforms and cryptocurrency ATMs.
With regard to VAT, the BMF follows the jurisprudence of the ECJ in Hedqvist. Transactions to exchange a traditional currency for bitcoin or other virtual currencies and vice versa are therefore exempt from VAT. Bitcoin or other virtual currencies that are used as a means of payment for services or goods are treated the same as traditional means of payment. Mining is not subject to VAT, because there is no identifiable recipient.
The Austrian National Bank (Oesterreichische Nationalbank, OeNB) does not qualify bitcoin as a currency, because it does not fulfill the typical functions of money due to a strict limitation on quantity and no stabilizing central authority. Bitcoin is currently not covered by the E-Money Act or the Payment Services Act. Ewald Nowotny, governor of the OeNB, has pointed out the risks of cryptocurrencies. He stated that “[b]itcoin & Co. . . . are highly speculative investments which entail high risks for individuals.” He therefore welcomed the initiative of the Federal Minister of Finance, Hartwig Löger, to establish a Fintech Regulation Council to regulate cryptocurrencies. In addition, he voiced support for the amendment of the EU Money Laundering Directives, as well as the proposal of the Austrian Ministry of Finance to require prospectuses for ICOs and introduce licensing by the Financial Market Authority (FMA). Finally he added that any regulatory initiative should be complemented by improving the financial education of the public.
Risks of Cryptocurrencies
Like the OeNB, the FMA has warned investors of the risks of cryptocurrencies. It stated that virtual currencies like bitcoin and trading platforms are neither regulated nor supervised by the FMA. The FMA does not qualify them as legal tender payment instruments or as tradable foreign currencies. However, it pointed out that certain business models might require authorization from the FMA. The FMA decides on a case-by-case basis whether an ICO requires authorization.
 The following is attributable to the Library of Congress.
 Steuerliche Behandlung von Kryptowährungen (virtuelle Währungen) [Tax Treatment of Cryptocurrencies (Virtual Currencies)], BMF, https://www.bmf.gv.at/steuern/kryptowaehrung_Besteuerung.html (last updated July 25, 2017), archived athttp://perma.cc/BU4Z-3BFY.
 Case C-264/14, Skatteverket v. David Hedqvist, ECLI:EU:C:2015:718, http://curia.europa.eu/juris/celex.jsf? celex=62014CJ0264&lang1=en&type=TXT&ancre, archived at http://perma.cc/7Q6Q-MM9V.
 Steuerliche Behandlung von Kryptowährungen (virtuelle Währungen), supra note 135.
 Sind virtuelle Währungen wie Bitcoin eine Alternative zu klassischen Währungen wie dem Euro? [Are Virtual Currencies Like Bitcoin an Alternative to Traditional Currencies Like the Euro?], OeNB, https://www.oenb. at/FAQ/sonstiges.html (last visited Mar. 20, 2018), archived at http://perma.cc/AN2L-WHS5.
 Press Release, OeNB begrüßt Regulierungsinitiative von BM Löger zu Kryptowährungen [OeNB Welcomes Regulation Initiative of Federal Minister Löger on Cryptocurrencies], OeNB (Mar. 2, 2018), https://www.oenb.at/ Presse/20180302.html, archived at https://www.oenb.at/Presse/20180302.html.
 Bitcoins, FMA, https://www.fma.gv.at/en/fma-thematic-focuses/bitcoins/ (last visited Mar. 20, 2018), archived at http://perma.cc/C3QF-N7NU. FMA, Focus on Virtual Currencies. Bitcoin, Ethereum, Ripple & Co from the Perspective of Investor Protection, https://www.fma.gv.at/download.php?d=3090 (last visited Apr. 5, 2018), archived at http://perma.cc/K7WF-HBAY.
 Focus on Initial Coin Offerings, FMA, https://www.fma.gv.at/en/fma-thematic-focuses/fma-focus-on-initial-coin-offerings/ (last visited Mar. 20, 2018), archived at http://perma.cc/3HT8-HES7; FinTech Navigator, FMA, https://www.fma.gv.at/en/cross-sectoral-topics/fintech/fintech-navigator/ (last visited Mar. 20, 2018), archived at http://perma.cc/9MVT-QA9M.