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EU VAT liabilities on cryptocurrencies and NFT platforms

Platforms as undisclosed agents hold VAT bill on certain tokens and NFT’s

Crypto-assets are similar to digital services for VAT, meaning digital intermediaries and marketplaces are generally liable where they facilitate the sale and control terms, delivery and charging. There is some variation where the service is VAT exempt, including cryptocurrencies.

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What are crypto-assets?

Crypto-assets are a type of digital asset  held on blockchain, distributed digital ledger technology. They digitally record or certify a value, asset ownership or contractual right to goods or services.

They include (per EU VAT crypto-assets review):

  • Payment tokens or Cryptocurrencies – Bitcoin, Ether, Ripple, and Litecoin which are typically VAT exempt as non-fiat currencies.
  • Security tokens Cypro funds – investment funds allow you to access cryptocurrencies without directly purchasing, owning, and trading the coins yourself.
  • Tokens (subject to VAT as digital service):
    • Utility tokens – giving access to specific goods or services, including entrance to events
    • Security tokens – used in business raising auctions
    • Non-fungible tokens (NFT) – unique digital ownership record for art, musc, video digital rights

VAT liabilities sit with platforms

Generally, digital marketplaces are treated as agents when introducing buyers and sellers.

This can be in two ways from a VAT perspective:

  1. Disclosed agent – when acting in the name of and on behalf of the seller. There is a single VAT transaction with the buyer, and any obligations sit with the seller.
  2. Undisclosed agent – when acting under its own name. Most countries treat this as two transactions – seller to marketplace; then marketplace to buyer.

The tax authorities will by default assume a marketplace is the deemed supplier as undisclosed agent unless it’s the seller charging, delivering or setting the T&C’s for the transaction.

Ongoing reviews of VAT on crypto tokens

The EU VAT Committee is reviewing VAT on cryptocurrency payment tokens. At the member state level, confirmation on Belgium Non-Fungible Token VAT and Spain VAT NFT has already been issued. New Zealand GST on NFT’s has also been confirmed. In the US, Washington state levied sales taxes on NFT‘s from 1 July 2022.


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