The European Commission’s VAT Committee recently released a review discussing the VAT implications for NFTs within the EU.
The report aims to provide clarification on the rapidly evolving NFT ecosystem and provide guidance on how to reach a common VAT practice across the EU. The review covers several possible VAT transactions, including the creation or minting of NFTs, trading NFTs, and earning NFTs as a reward.
The review concludes that NFTs are electronic services and, therefore, subject to VAT. Countries such as Spain and Belgium have already classified NFTs as a taxable electronic service, while cryptocurrencies remain exempt. Norway and New Zealand have also followed suit. The US state of Washington started imposing sales taxes on NFTs from July 1, 2022.
Overall, the report provides valuable insight into the VAT implications for NFTs within the EU and offers guidance for countries looking to establish a consistent VAT practice.
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