The Spanish tax authorities’ position, as set out in binding tax rulings V1274-20 of 6 May and V1748-18 of 18 June, is aligned with that of the European Court of Justice, which held that virtual currencies constitute a currency in the sense of Article 135(1)(e) of the VAT Directive and are a direct means of payment. In this regard, the Spanish tax authorities have established that services related to virtual currencies will apply the VAT exemption for financial services. Thus, input VAT will not be deductible. Regarding the mining activity the Spanish tax authorities have established that this is an activity not subject to VAT as there is no clear link between the service rendered and the remuneration received. Consequently, the mining activity does not confer per se on the miner the condition of VAT entrepreneur and therefore any VAT input borne by a taxpayer carrying out virtual currencies mining activity will not be deductible if connected to this activity.
Source: lexology.com
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