Developments in the variety and ingenuity of digital asset transactions have far outpaced the guidance that can be provided by tax authorities or courts on their VAT treatment. However, a number of non-UK rulings provide some insight into the VAT characterisation of transactions concerning digital assets such as cryptocurrencies and non-fungible tokens (NFTs). A decision of the German Federal Tax Court also provides guidance on the VAT treatment of transactions taking place in a virtual world. Each case emphasises the importance for VAT practitioners of digging beneath the technical terminology surrounding the transaction to identify the legal rights arising and real-world economic consequences.
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Developments in the variety and ingenuity of digital asset transactions have far outpaced the guidance that can be provided by tax authorities or courts on their VAT treatment. However, a number of non-UK rulings provide some insight into the VAT characterisation of transactions concerning digital assets such as cryptocurrencies and non-fungible tokens (NFTs). A decision of the German Federal Tax Court also provides guidance on the VAT treatment of transactions taking place in a virtual world. Each case emphasises the importance for VAT practitioners of digging beneath the technical terminology surrounding the transaction to identify the legal rights arising and real-world economic consequences.
If you are not a subscriber, subscribe now to read this content.
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