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Italy exempt Cryptoassets mining and utility tokens for funding offers from VAT

Two rulings clarify VAT liabilities on Cryptoassets

The Italian Agenzi Entrate has provided guidance on the VAT liabilities of Cryptoassets in two rulings

VAT exemption for Cryptoassets Mining

The tax authorities stated that mining or forging (creation) of cryptoassets is an exempt activity. This is based on not being able to distinction between the service provider and the miner customer. This disqualifies the miner from the right to deduct VAT.

This falls into line with the preliminary EU VAT on cryptoassets review being undertaken by the VAT Committee.  The EU looks likely to conclude that even when within the scope of VAT, it is likely to be an exempt supply since it is a transaction concerning payments and currency – Articles 135(1)(d) and Article135(1)(e) of the VAT Directive.

Utility tokens for initial coin offerings are exempt

Generally, utility tokens are liable to VAT ( a virtual prepayment for goods or services similar to vouchers). However, in this case, a utility token was issued for a fund raising for a blockchain copyright venture. Since the utility token can change in nature, so unlike a single use voucher and a deemed supply. The token in this case is therefore outside of the scope of VAT as determined by .

Again, this topic is being reviewed by the EU VAT Committee.


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