European Union: VAT Committee publishes guidance on VAT treatment of NFTs

Working Paper No. 1060 recently published by the EU VAT Committee is an important step towards harmonizing the VAT treatment of NFTs across the bloc. Considering the increasing number of NFT transactions, the document addressing NFT-related issues and providing some general insights into what VAT rules apply in each case is in line with the EU’s regulatory regime (MiCA, DAC 8). Determining whether NFTs are goods or services is necessary to ensure the correct VAT treatment of each transaction (property titles, vouchers, composite supplies, electronic services). Taxable status of the parties involved in transactions, possible exemption, NFTs earned, existence of a consideration, NFT price, other fees and charges (marketplace fees, gas fees), place of taxation, treatment of supplies linked to NFTs in different member states are among the key points to be considered.