The EU Court of Justice has ruled that Bitcoin exchange is exempt from VAT in a landmark ruling.

The news follows a dispute in Sweden over the tax status of Bitcoin, with the Swedish Tax Agency lobbying for the rules to be relaxed and publishing a recommendation that this should occur.

Previously, the VAT landscape in the EU varied between states, with some exempting Bitcoin services such as Finland and Spain and some requiring the currency to adhere to standard tax laws common to fiat currencies.

Now, the exemption will be applied EU-wide, as Bitcoin exchange has now been formally declared VAT-free, Bloomberg writes.

Bitcoin transactions "are exempt from VAT (value-added tax) under the provision concerning transactions relating to currency, bank notes and coins used as legal tender," the court ruled.

Meanwhile, European cryptocurrency community are waiting to see the details of the ruling.

"If the government rules exchange of virtual currencies as tax free, then they would ultimately be de-funding themselves. Why would they do that?" Ken Code of Bitshares Munich said to Cointelegraph. He continued: