Comments on ECJ C-472/24: AG Opinion on Taxation of Virtual Gold in Online Gaming

Gaming currencies and the issue of VAT – Opinion of the Advocate General

VAT Dispute Overview: A Lithuanian entrepreneur faced a VAT assessment for not charging VAT on sales of virtual “gold” used in online games. The tax authority argued that these sales should be subject to VAT, leading to a dispute over whether virtual gold qualifies as currency, a voucher, or if a margin procedure applies for taxation.
Advocate General’s Opinion: The Advocate General concluded that in-game gold does not meet the criteria for being considered a currency under VAT Directive Article 135(1)(e), as it operates solely within the game environment without bidirectional convertibility like cryptocurrencies. Additionally, it cannot be classified as a voucher since it represents an immediate electronic service rather than a future benefit.
Implications for Margin Procedure: The Advocate General indicated that virtual gold should not be treated as second-hand goods eligible for the margin scheme since it is classified as an electronic service, emphasizing the need for a broader interpretation of VAT regulations in light of technological advancements. The final ruling from the CJEU may reflect or diverge from this opinion, particularly regarding the treatment of virtual currencies in taxation.

Source MDDP

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AG Kokott’s advice on VAT exemption, vouchers & margin scheme

VAT Exemption Denied: Advocate General J. Kokott concluded that in-game gold does not qualify for VAT exemption under Article 135(1)(e) of the VAT Directive, as it is not considered legal tender and is only used within the game, lacking the characteristics of a currency that serves as a means of payment in legal transactions.
In-Game Gold Not a Voucher: The AG determined that in-game gold does not meet the criteria for classification as a multi-purpose voucher under Articles 30a and 30b of the VAT Directive. Instead, it is regarded as a consumable benefit (an electronic service) rather than a means to obtain a service later, which a voucher would typically represent.
Margin Scheme Applicability: The AG suggested that, by analogy, the margin scheme under Article 311 et seq. of the VAT Directive could apply to in-game gold if certain conditions are met, proposing a broader interpretation to include intangible assets traded similarly to tangible goods. This approach aims to prevent double taxation and ensure fiscal neutrality, though it requires that in-game gold transactions typically involve VAT residue and are traded comparably to second-hand goods.