VATupdate Newsletter Week 44 2025

TOKENS

Here’s this week’s VATupdate.com Newsletter again, packed with VAT news from around the world. Here’s a Top 4 to get you started:

Case T-614/25 – Trading 4 (Latvia): Who Owns It When It Moves?
A Latvian wholesaler sold excise goods through intermediaries who handed over ownership before the truck even rolled out. The Court is asked whether the first supply in this chain transaction still qualifies for the VAT zero-rate.
Case T-638/24 – D GmbH (Austria): When Formalities Go Wrong
Can an intra-Community acquisition still count if the invoices or VAT IDs aren’t quite right? Austria thinks maybe not, but the Advocate-General leans the other way, arguing that form shouldn’t kill substance.
UK Supreme Court: NHS Car Parking Subject to VAT
The UK’s highest court decided hospital parking isn’t immune to VAT just because it’s healthcare-adjacent.
Germany: First VAT Ruling on NFTs (Lower Saxony Tax Court)
Germany takes the lead in clarifying how NFTs fit into VAT, at least for now. The court treated NFT trading as a supply of services, offering early guidance in a market that’s still more pixel than principle.

That German case got me thinking: what is art?

Once upon a time, art was simple. You painted something, someone bought it, and you both went home with a tangible sense of ownership. One with a painting, the other with a heavier wallet.

Then came NFTs, or non-fungible tokens. Think of them as digital certificates of ownership stored on a blockchain. A sort of indestructible online ledger that says, “this pixelated penguin belongs to Bob.” The “non-fungible” bit just means it’s unique: you can’t swap one bunch of pixels for another and call it even.

Not too long ago, one artist famously sold an invisible sculpture for more than €15,000. It was a masterpiece consisting of absolutely nothing. It came with a digital certificate proving that you – and only you – owned that particular patch of non-existence. The ending? The buyer later demanded a refund when they “lost the file.”

If that doesn’t make you yawn, you probably work in VAT.

Because the German tax court recently had to decide what, exactly, an NFT is for VAT purposes. Is it a good? A service? Or simply a clever way to make people pay real money for virtual air? The court settled (for now) on “a supply of services.” Logical, since nothing actually changes hands (other than euros and a line of code saying you own a JPEG of a duck with sunglasses).

This classification matters because, in a B2C situation, services are taxed where the customer receives or ‘enjoys’ the service. Which means the seller must determine where their customer is when they buy the NFT. Good luck trying to unravel the blockchain.

And perhaps that’s the real art of it: finding value in the intangible. After all, VAT professionals have been doing that for decades, turning abstract transactions into concrete tax liabilities.

So, while the rest of the world wonders why someone would pay a fortune for a digital banana taped to a virtual wall, we deal with “the real thing”: somewhere, somehow, someone needs to account for the Value Added Tax on it.

With so much VAT information on our website, it almost starts looking like a museum on VAT. From old ECJ cases to the modern trends and solutions to avoid mistakes: you can find everything on www.vatupdate.com.

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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