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- Questionnaire -
Introduction:
This questionnaire is intended to help the New Economics Foundation on behalf of CCIA to collect
information from other community currency projects and organization about the existing knowledge,
experiences and strategies concerning the impact of laws and regulations on the implementation,
operation and scalability of community currencies. The input collected will support the production of a
public document compiling and outlining of the current legal and compliance issues as faced by the
different currency types in different countries.
We hope to cover all pertinent community currency types, including but not limited to:
We know your time is precious, but we consider this a unique opportunity to compile this kind of
information and we will make this shared learning available to all other practitioners worldwide. Please
submit as much information as you can and/or send supporting documentation in any form that suites
you to Leander.Bindewald@neweconomics.org
Taxation
Insurance
Labor Law
Data Protection and Safety
Financial Services Regulation
Acceptance of Community Currencies
Your Name:
[Please insert response here.]
Legal Topics
1. Taxation
Tax authorities and regulators can consider community currencies to be a means by which individuals and
companies can more easily escape the tax implications of the transactions that they engage in. It is
therefore vital that any community currency seeks to mitigate these legitimate concerns by addressing the
impact on VAT, Corporation tax and Income tax of individuals and companies using the scheme.
For example, in the Netherlands a ruling has been obtained from the tax authorities that currency earned
through social currency schemes are not taxed up to the equivalent of a maximum annual remuneration
of volunteers up to 1500. However the situation varies in the different NWE countries and for some
similar policies are yet to be. A further challenge is designing a calculation model which allows for
computing equivalent legal tenders for currencies that are circulated on a completely different basis such
as hours.
To maintain the integrity of the community currency programs CCIA will do an in-depth risk analysis to
understand how to mitigate the possibility of users avoiding paying all the tax due to the authorities. An
initial assessment is, that social currencies (e.g. Timebanking, loyalty schemes etc.), due to their relatively
limited scale in terms of individual balances and individual earnings, and spending opportunities, in
general have a low risk of tax avoidance by users. For currencies in the professional/b2b mutual credit
and legal backed tender, where the potential risks are higher, measures have already been implemented
to verify the identity of participants when they enter the scheme. Your input here will help our further
analysis of risk and development of adequate mitigation strategies.
1.1 Value Added Tax (VAT)
How do community currencies comply with VAT law?
Links to original law texts and contact details regulatory authorities relevant for this sub topic:
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2. Insurance
Under this topic there are 2 sub-topics that will need to be investigated by the responsible partners.
Firstly the impact on volunteers engaging in work on behalf of the currency operator and related need for
insurance. Secondly how the governance board will be indemnified against major risks.
In some cities/municipalities citizens engaging in volunteer work are covered by a municipal
(accident/disability) insurance policy. There are, however, many municipalities where this not the case.
The partnership will need to assess this for all programs we develop, and, where necessary, negotiate
favorable terms with insurance companies to provide coverage in the event no city-wide volunteer
insurance exists.
The partners are required to research the appropriate/common arrangements for insuring volunteer work
in their country. Please also indicate if city wide coverage exists at all, or in what ways institutions
engaged in organizing volunteering ensure the required level of insurance.
Companies, charities, foundations and other entities (either profit or non-profit) who seek to introduce a
currency scheme will need to consider the issue of potential liability of governance board members in the
case of default, bankruptcy or other eventualities. In some countries (e.g. NL), insurance products for this
type of liability are available (as long as the liability is not a result of e.g. illicit activities).
For insurance companies the risks involved in running a community currency scheme may not be
straightforward to assess, which means a negotiation can be required to agree upon the appropriate
insurance policy.
2.1 Volunteer insurance (accident/disability)
How do community currencies ensure that they provide volunteer insurance?
Links to original law texts and contact details regulatory authorities relevant for this sub topic:
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3. Labor law
One of the main target groups for social currencies are vulnerable an excluded strata of society, such as
people with disabilities, the unemployed and people in deprived communities generally. Many of the
people that can be (re)engaged and could participate in a social currency scheme are recipients of
government/municipal welfare or (unemployment) benefits. For them to safely participate it is important
that a dialogue is started and rulings are obtained on the potential impact of participation in social
currency schemes from the relevant national and local authorities in the countries in which we implement
them.
3.1 Social security
How do community currencies ensure that users understand the social security implications of
participating?
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6. Acceptance of CCs
Being accepted in lieu of legal tender particularly by public entities is the goal of many CCs. Municipalities
accepting local currencies for both services (swimming pool, public transport etc..) and taxes (business
rates, local taxes) gives CCs greater use value and credibility. However, especially in the Eurozone, those
who tried to establish such spending possibilities in different countries encountered barriers of different
kind, sometimes of personal nature (risk averseness) sometimes allegedly due to regional procedure
regulations, state law or even EU law.
6.1 Acceptance of CCs for municipal services and taxes
Have community currencies faced any legal challenges to having their currency accepted for municipal
services or taxes? If yes, what were they, and did you verify the validity of the claim?
Links to original law texts and contact details regulatory authorities relevant for this sub topic:
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