Bitcoins and VAT
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Transcript of Bitcoins and VAT
www.pwc.com
Sophie Claessens (PwC)
20 November 2014
Virtual Reality and VAT
A First Outlook on the EU VAT rules for bitcoin
transactions
PwC
The rise of virtual currencies
2
20 Nov 2014
Companies selling…
Companies accepting…
Earning “money” in a game
Monopoly revisited
Buying a better (gaming) experience
Facebook credit, HayDay…
PwC
Bitcoins – What is it and how does it work?
ECB definition of virtual currency
“A virtual currency is a type of unregulated, digital money, which is
issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community”
Classes of virtual currency
20 Nov 2014
3
PwC
What does it mean for VAT?
20 Nov 2014
4
No definition in the EU VAT Directive
VAT is an indirect tax on consumption
o No consumption = no supply = no tax
Articles 1 and 2 VAT Directive, Case C-419/02 BUPA, Case C-172/96, First National Bank
But, transactions concerning money are exempt
- Article 135(1)(e)
“transactions, including negotiation, concerning currency, bank notes
and coins used as legal tender, with the exception of collector’s items (…)”
- Article 135(1)(d)
“transactions, including negotiation, concerning deposits and current accounts, payments, transfer debts, cheques and other negotiable instruments, but excluding debt collection”
PwC
Virtual currencies and their VAT treatment
20 Nov 2014
5
How to treat bitcoins and other virtual currencies for VAT purposes…
o A form of electronic money
o A currency
o A debt instrument
o A security
o A Multi-Purpose Voucher
o A digital product
… depends on the legal and commercial classification
Case C-461/12 Granton Advertising
Case C-520/10 Lebara
PwC
Virtual currencies and their VAT treatment
20 Nov 2014
6
Multi Purpose Vouchers (MPV)
- Case C-40/09 Astra Zeneca UK
- Commission voucher proposal COM(2012)2016 final
- An MPV is an instrument that carries a right to receive a supply of goods or services, where the supplier’s identity, where the supply takes place or the applicable VAT rate, is not known at the time of issue Article 30a(1) original proposal
- The distribution of an MPV should be seen as a service performed by the acquirer of the MPV to the seller, when the sale is made of another person than the issuer and the price is below the nominal value of the voucher Article 25(d) and Article 74a(2) original proposal
- When the MPV is redeemed against goods and services, the redeemer is liable to pay VAT on the supply Article 30b original proposal
- ‘Light’ approach in Italian Presidency compromise proposal (October, 2014)
PwC
What does it mean for VAT?
20 Nov 2014
7
The answer may come from EUCJ
- Pending case C-264/14 Hedqvist
PwC
Stay tuned
PwC Tax Belgium NewsHubhttps://www.news-pwc.be/
PwC ebiz bloghttp://ebiz.pwc.com
Global VATOnline – GVO 2015 modulehttps://globalvatonline.pwc.com
Entertainment & Media microsite http://www.pwc.co.uk/entertainment-media
Digital Pulse http://www.digitalpulse.pwc.com.au/
20 Nov 2014
8
Sophie Claessens
+32 473 910 [email protected]
© 2014 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network.
Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
