Clarification of VAT treatment for NFT compared to cryptocurrencies
The Belgian Federal Public Services has clarified VAT and accounting rules for Non-Fungible Tokens (NFTs). It is the latest tax office to give VAT guidance on the unique tradable digital assets – Spain NFT VAT guidance came in May.
NFT’s are the digital ownership of a defined digital assets, e.g. a digital image, photos, videos, and audio files. They are typically recorded on blockchain technologies. The ownership of the NFT is held on the blockchain, and must be updated when the NFT is bought and sold between parties. They are regarded as a financial security.
Since NFT’s are unique unlike regular (fiat) money or digital currency, and are not interchangeable means of payment, they are regraded as a digital certificate of authenticity. So not a digital currency or physical good. Unlike bitcoin or similar digital currencies, they are therefore not VAT-exempt forms of payments according to the Belgian authorities.
In addition to not being exempt financial services forms of payments, they are not regarded as goods. Instead, they are viewed as digital services and subject to the standard Belgian VAT rate of 21%.
The Service also clarified that sales of NFT’s will be subject to Capital Gains Tax, as with cryptocurrencies.