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NFTs must be regarded as a supply subject to VAT

NFTs (non – fungible tokens or non-exchangeable tokens) are digital certificates of ownership whose authenticity is guaranteed by blockchain. They are often auctioned online. For investors, it is similar to speculating on the stock market.

It is about non-exchangeable crypto-assets because no equivalent of equivalent value can be found with which they could be exchanged. They are unique and identifiabl

NFTs are not considered a means of payment. They are digital collectibles or digital art objects. The exemption of Article 44, § 3, 9° of the VAT Code does not apply.

Trading in NFTs must be regarded as a supply subject to VAT, insofar as these transactions are deemed to take place in Belgium.

According to Article 7(2)(a) of Implementing Regulation 282/2011, the supply of digitized products is generally to be regarded as a service provided by electronic means.

As a result, the provisions of Articles 21, § 2 and 21 bis, § 2, 9° of the VAT Code apply to the positioning of the service consisting of the sale of an NFT.

To the extent that the sale of NFTs is deemed to take place in Belgium, the normal VAT – rate of 21% applies, as they are not regarded as works of art within the meaning of item XXI of table A of the appendix to Royal Decree No. 20 of 20.07.1970 on VAT – rates.

Since NFTs are not goods, taxable resellers of NFTs cannot invoke the special regime of taxation of the profit margin as provided for in Article 58, § 4 of the VAT Code.

This includes a digital collector’s item or a digital art object, such as an image or a video clip or a digital collage or a first tweet. They are often purchased with crypto coins.

Source Fisconet

 

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